Cornyn Amendment (#3712) on Medicaid Fraud

• The amendment reduces the federal Medicaid match by 1 percentage point for any state for which the payment error rate measurement (PERM) is over 10 percent, beginning in 2014.
  
• CBO has opined that the amendment would have the effect of reducing federal deficits.

• Medicaid faces numerous incidents of fraud.  Reports by The New York Times in 2005 found that the state Medicaid program had reimbursed a Brooklyn dentist who billed Medicaid for 991 procedures in one day—even as the same newspaper found a poor teenager turned away three times without being asked to fill out a Medicaid application.
  
• A former New York state investigator estimated that up to 40% of all state Medicaid claims paid—representing nearly $18 billion for New York alone—are questionable.
  
• The Government Accountability Office (GAO) has frequently criticized the lack of accountability within the Medicaid program, including a May 2008 study where GAO could not provide a total amount of supplemental payments by state Medicaid programs—because state reporting on the billions of dollars spent was incomplete.
  
• The amendment would give states an incentive to strengthen their efforts to fight fraudulent and questionable payments.
  

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