Health Care Ripoff part 2: Medicaid's Managed-Care Insurers getting Overpaid, wasting Taxpayer Dollars.

Scott Walker and the Republican legislature can't stop whining about how much of the state budget goes to pay for Medicaid. Maybe, just maybe, they're not trying hard enough to save money in the program. The article below wasn't clear about whether Walker's Wisconsin as one of the states that audits Medicaid's manage-care insurers. The state does contract with Health Management Services (Irving, Texas) for spotting fraud, but there was no mention of overpayments to insurers managing Medicaid, or clawing it back.

Leave it to our Democratic President Barack Obama for issuing new rules that cut the programs costs down dramatically:

Medicaid's unmanaged managed care-April 30, 2016: Last year, Rhode Island auditors found a big problem in the small state's $2.6 billion Medicaid program. Its two Medicaid managed-care insurers, Neighborhood Health Plan and UnitedHealthcare, were getting overpaid—by a lot ...  a combined $208 million, or about 8% of the Medicaid budget. Most of the erroneous payments stemmed from a faulty estimate of costs for newly covered Medicaid beneficiaries, who wound up using fewer medical services than anticipated  ... Rhode Island clawed back about $75 million and expects to recoup most of the remaining funds this year, giving credence to the effectiveness of its audit process. 

But it is one of only a few states that have instituted effective Medicaid managed-care auditing programs. In a scathing 2014 report, the Government Accountability Office suggested the Center for Medicaid Service require states audit payments both to and by private Medicaid insurers. The Obama administration responded last week by issuing a final rule ... Regulators and outside auditors will now put more Medicaid insurers under the microscope to ensure federal and state taxpayer dollars are not wasted—the central reason that states moved to managed care in the first place.

A number of major insurers keep their Medicaid medical spending hidden from public view. Four of the nation's large commercial insurers—Aetna, Anthem, Humana and UnitedHealth—do not disclose specific Medical Loss Ratio's for their Medicaid plans in their public filings despite their massive Medicaid footprints. UnitedHealth, for example, operates in about two dozen states and recorded almost $29 billion of Medicaid revenue in 2015. A few publicly traded insurers with large Medicaid managed-care programs provide a clear view of how they spend their Medicaid revenue. Those that have opted for transparency, Centene Corp, Molina Healthcare, and WellCare Health Plans, show operations well within the bounds of what the CMS wrote into stone. 

A suggested medical-loss ratio (MLR) may now force those payments into the open and help state officials set their rates for insurers. MLRs show how much of the capitated premiums are being spent on medical care and “quality improvement activities.” The Center for Medicaid Services finalized instituting a nationwide 85% MLR standard for Medicaid plans, which will put Medicaid in line with Medicare Advantage, individual and employer plans that are already required to clear minimum MLRs ... require states to conduct or farm out audits of their managed-care plans at least once every three years. However, there's no penalty for not meeting that mark, and states have a lot of latitude in actually establishing MLRs into their rate-setting.

18 states and D.C. have a minimum Medicaid MLR requirement, nearly all of which set the floor at 85% or higher, according to the Kaiser Family Foundation. 

For profit industries are crying wolf, suggesting an incentive for racing to the bottom.