Exclusive– Rep. Buddy Carter: ‘We Can Cut Medicaid Costs Through Eliminating Waste, Fraud, Abuse’

Medicare Fraud Louis Lanzano AP
Louis Lanzano/AP

Rep. Buddy Carter (R-GA) told Breitbart News in an exclusive interview that hiring private contractors to confirm eligibility for Medicaid and other entitlement programs can “cut costs through eliminating waste, fraud, and abuse.”

Rep. Carter sponsored H.R.1333, the Freedom to Use Contracted Entities Act – a bill that would allow private contractors to make eligibility determinations on behalf of State Medicaid programs – an idea that could have far-reaching implications for cutting waste, fraud, and abuse throughout federal and state bureaucracies.

Rep. Carter told Breitbart News that Illinois hired private contractors to confirm eligibility for their state Medicaid program to curb costs and fraud, and they saved millions doing so. Carter told Breitbart News:

Well, fortunately, Illinois had some experience with this. The state of Illinois actually had an outset group, a private contractor, to determine breach of eligibility of people in the Medicaid program and they did exceptionally well. They found that files had missing evidence some people were deceased that were applying for benefits again, and they were not verifying social security numbers, and they brought in a vendor into Illinois, and they reviewed over 5,000 cases, and they ended up canceling almost over half of them. Unfortunately, they had a union case brought against them against the state to halt the use of private contractors, and a judge ruled in their favor, and they had to end that. What we are trying to do is change the statute, so they can use private contractors.

In 2010, the Office of Inspector General at the Illinois Department of Healthcare and Family Services conducted an audit of the state’s “passive” redetermination process. Under the Illinois Medicaid enrollment process, the enrollees will receive a letter telling them their eligibility will continue unless they tell state official that they are no longer eligible for Medicaid.

The audit found that 34 percent of randomly selected Medicaid files contained eligibility errors. The majority of errors were related to clients refusing to report information regarding income, citizenship, residency, and household composition. The report also found that state bureaucrats failed to protect the program’s integrity. The auditor general’s report labeled several case files that contained missing evidence that income had never been verified and state workers did not bother to collect paystubs at all and simply verified applicants’ wages verbally or through handwritten notes. Other files were missing evidence that the state had ever verified Social Security numbers, citizenship, or residency.

Illinois taxpayers paid millions of dollars in welfare benefits to citizens that were no longer eligible and may have never been in the first place. By 2012, the Medicaid program faced a $2.7 billion structural deficit.

To combat the rising tide of Medicaid fraud, the Illinois General Assembly required the Department of Healthcare and Family Services to launch the Illinois Medicaid Redetermination Project. The project was designed to root out waste, fraud, and abuse in the Medicaid program by requiring enhanced eligibility for those enrolled in the program through an independent vendor. The independent vendor checked federal, state, and commercial databases to verify eligibility for individuals enrolled in Medicaid.

By the end of the first year, Illinois had identified and disenrolled roughly 300,00 ineligible welfare recipients. By the second year, the state had disenrolled an additional 400,000 welfare recipients from the program. This represents more than ten percent of Illinois’ entire Medicaid program removed each year.

Based on projections from Illinois Policy, taxpayers could save between $390 and $430 million per year, with even greater savings coming over time. This figure represents nearly two percent of the state’s $20 billion Medicaid budget.

Carter told Breitbart News that the legislation has significant support amongst his Republicans colleagues.

“You would expect on my side of the aisle they are very much in favor of it. I think all of them recognize the Illinois case that saved taxpayers money and made it better for those that truly do need it. Medicaid is an essential program, for those who need it. However, there’s so much waste in it,” Rep. Carter explained.

Carter then suggested that this idea to confirm eligibility through contractors for entitlement programs could also be applied to other entitlement programs such as the Supplemental Nutrition Assistance Program (SNAP) and Temporary Assistance for Needy Families (TANF) programs.

The Georgia congressman said, “There’s not a question about it. Making sure that beneficiaries get their benefits in a timely manner is very important as well. Again, these are people that need, truly need these programs, and make sure they’re not on a backlog, and make their applications are going through.”

Carter added that this idea could be applied through new health care reform legislation: “This fits perfectly in the context of health care reform, and this is the type of healthcare reform that we need. One of the ways that we can cut costs is through eliminating waste, fraud, and abuse. This is an example of a program that can do just that.”

“Giving states the flexibility to reform their programs is just common sense,” Carter added.

Carter concluded that this legislation would ensure integrity in the Medicaid system and not impact those who truly need Medicaid. Carter charged, “Not for one minute – this will not impact people that truly need it. This finds people who are dead, who don’t comply with the rules, and people who game the system.”


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