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CMS Medicaid Demonstrations Lack Transparency, GAO Finds

The US Government Accountability Office (GAO) released a report this week finding that the Centers for Medicare & Medicaid Services (CMS) is insufficiently open about Medicaid demonstrations. Demonstrations allow states to test new approaches to delivering services under the Medicaid Program. Currently, demonstrations account for nearly a third of Medicaid spending.

The laws that permit demonstrations, including the Affordable Care Act, require CMS to solicit and consider public comment and to make public information about pending and approved demonstration applications. The GAO found, however, that for two of the four new applications or extensions they examined, states submitted changes to their applications that could have significant effects on beneficiaries without obtaining public comments on those changes at the state level, and that CMS has only “limited” requirements for amendments to existing demonstrations. CMS does not require amendment applications to include how the changes may affect beneficiary enrollment or report on concerns raised in the states’ public comments.

This is a particularly concerning development where states have proposed major changes—including the implementation of controversial work requirements—through amendments. One of the states that did so, Arkansas, has been the subject of a lawsuit in which a federal judge found that requirement was implemented in a way that was inconsistent with the law, and it was invalidated. The Trump administration is appealing that decision and a similar ruling which struck down a similar work requirement in Kentucky.

Medicaid demonstration projects are intended to be investigative tests of changes to the program. It is vital that CMS do more to ensure transparency and public accountability for its approved Medicaid demonstration projects to ensure Medicaid continues to do what it was created to do—supply health insurance coverage.

Read the GAO report.

Read more about potential issues with current demonstration projects.

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