State forced to repay millions after giving taxpayer-funded health care to 'noncitizens'

By Jason Hopkins
Daily Caller News Foundation

California owes the federal government tens of millions of dollars for incorrectly claiming medical care reimbursements for noncitizens, a federal audit found.

The Golden State must repay nearly $53 million to the federal government after it “improperly” claimed reimbursements from the Medicaid program for illegal immigrants and other noncitizens, according to a recent report by the Office of the Inspector General at the U.S. Department of Health and Human Services. The findings emerge as California grapples with a massive budget deficit in the tens of billions of dollars.

The issue surrounds how California officials calculated federal reimbursements for noncitizen medical care.

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States are largely prohibited from claiming Medicaid reimbursement for treating foreign nationals who do not meet federal requirements, with some exceptions for medical emergency situations, according to the audit. The federal government refers to this prohibited category as “noncitizens with unsatisfactory immigration status,” a group that does not include migrants who have been granted asylum, refugees, or were given legal permanent residence status.

However, states are allowed to expand their Medicaid programs to provide additional coverage to other noncitizens, as long as it is fully funded by the state government, according to the Department of Health and Human Services. California has largely done so with their own state program, known as Medi-Cal, which gives coverage to illegal immigrants.

California used a formula to determine how much its Medi-Cal program spent on “nonemergency services” for illegal immigrants and other noncitizens not covered by the federal government, and then subtracted it from the total spent on emergency care — ultimately calculating a price tag that was reimbursed under Medicaid, according to the report.

Federal auditors found the calculation method used by California to be incorrect, determining it had not been updated in years. The report found that, of the nearly $373 million in Medicaid reimbursements for noncitizens who did not meet the federal threshold, California “improperly” claimed $52.7 million between October 2018 and June 2019.

“California improperly claimed $52.7 million in Federal Medicaid reimbursement because it continued to use the proxy percentage that was developed in the early 2000s without assessing whether the percentage correctly accounted for the costs of providing nonemergency services to noncitizens with UIS under managed care,” the audit found. “In addition, California did not have any policies and procedures for assessing and periodically reassessing the proxy percentage.”

The report recommended California officials refund the money to the federal government and coordinate with regulators to determine how much other federal money may have been incorrectly claimed in other years not covered by the audit.

The report emerged just weeks after California Democrat Gov. Gavin Newsom announced hundreds of spending reductions in order to deal with a near $45 billion dollar state deficit. Budget cut proposals were made to the state’s healthcare workforce, housing development, education facilities, scholarships, among other proposals.