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HRD-85-9 1 (1984-11-30)

handle is hein.gao/gaobabnnx0001 and id is 1 raw text is: ~' COMPTROLLER GENERAL OF THE UNITED STATES (2,Y7 WASHINGTON D.C. 20548 NOVEMBER 30, 1984 B-204545 To the President of the Senate and the Speaker of the House of Representatives Subject: Need for Legislative Change Affecting the Medicaid Program (GAO/HRD-85-9) In our ongoing review of the Medicaid program, we noted a possible inequity that could result in states having to pay the full medical costs for certain Medicaid recipients. The Congress intended that Medicaid be used as a secondary payer--that is, any other insurance available to a recipient must be used before Med- icaid pays claims. Moreover, Medicaid law provides that no fed- eral funds can be used to make payments where Medicaid is not treated as a secondary payer. The possible inequity occurs when Medicaid recipients are also covered under other self-insured health plans which are regulated under the Employee Retirement Income Security Act (ERISA). These insurance plans are allowed to, and sometimes do, designate themselves as secondary payers to Medicaid. States administer Medicaid and also regulate most private health insurance plans and are, therefore, capable of assuring that plans under their regulatory control do not operate as secondary payers to Medicaid. ERISA, however, is federally administered, and insurance plans operating under it are exempt from state regulation. As a result, to the extent ERISA plans designate themselves as secondary payers to Medicaid, states are placed in the position where they may have to pay the medical costs of Medicaid recipients without the federal government sharing in such costs. Because states cannot regulate self-insured ERISA health plans, we do not believe the Congress intended to deny Medicaid funds to states because of the actions of such plans. However, the law and regulations as written require that federal funds be denied in some cases. The Department of Health and Human Serv- ices (HHS) recognizes this as inequitable and as yet has not dis- allowed federal participation in such situations. Allowing such participation, however, is contrary to Medicaid law and regula- tions. (106242) 125761

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