ATLANTA — Georgia is in line to recover $500 million from state Medicaid insurers for overpayments in 2020 and 2021, according to an insurance industry official who represents the companies.
The half-billion-dollar payout will come from two separate Medicaid recoveries, Jesse Weathington, the executive director of the Georgia Quality Healthcare Association, said. Due to the federal role in financing Medicaid, much of the returned money would likely go to the U.S. government.
The insurers were told the reduction was due to many Medicaid patients skipping medical care during the COVID-19 pandemic, along with other adjustments, Weathington said.
“It was surprising in terms of timing and the amount,” Weathington said. He added that the three Medicaid insurers were not given detailed breakdowns of how the state actuary arrived at the numbers.
The Georgia Medicaid insurers – Peach State, Amerigroup and CareSource – are paid a per-member, per-month rate to care for Medicaid members. These insurers continued to receive those payments from Medicaid while there was a drop-off in patient visits.
The repayments are known as clawbacks: When an organization believes it has overpaid for services, it takes steps to get the money back.
“Clawbacks mean people did not get health care,’’ Laura Colbert, executive director of Georgians for a Healthy Future, a consumer advocacy group, said. “Essentially, people may have missed services they needed last year. That’s no fault of the [Medicaid insurers] because we saw that happen across the board, regardless of the type of insurance. The state still has a right to address that based on their contract.”
The Department of Community Health, which runs Medicaid in the state, did not respond to GHN’s requests for comment.
The $202 million retrospective rate adjustment for 2020 is now awaiting approval from the federal Centers for Medicare & Medicaid Services, Weathington said. Another $300 million mid-year adjustment for 2021 is currently under negotiation, he added.
Medicaid, jointly financed by the federal government and individual state governments, covers low-income and disabled residents. Georgia pays the Medicaid insurers more than $4 billion each year to provide care to low-income children and other vulnerable populations. The state covers about one-third of those costs, with the feds funding the rest.
It’s unclear how much of the recovered funds will go to the feds and how much to Georgia’s coffers. But if it’s split by the normal funding formula, the state would gain more than $165 million.
The projected $500 million recovery comes after Medicaid insurers posted big profits during 2020, according to the Center for Children and Families at Georgetown University.
Before the pandemic, many states had measures in place to limit the profits that state Medicaid insurers could make on their contracts and ensure taxpayer dollars went to patient care. Georgia was not one of those states, according to the Center on Budget and Policy Priorities.
Other states have adopted or bolstered measures to recover taxpayer dollars that went to Medicaid programs while patients stayed home during the pandemic. There are different ways states can do this.
For example, Virginia directed state Medicaid insurers to increase payments to medical providers.
Two of the Georgia insurers – Peach State and Amerigroup – are owned by publicly traded, for-profit corporations, Centene and Anthem, respectively. Centene last year acquired WellCare, another Medicaid insurer, and closed down its WellCare Medicaid operations in May.
A third Medicaid insurer, CareSource, is a nonprofit company based in Ohio.