Proposed Law Would Protect Medicaid Payments During Fraud Cases

When agencies that receive Medicaid reimbursements are accused of fraud, it can impact that provider as well as its patients for months at a time—regardless of whether any parties are ever found guilty.

Four U.S. lawmakers recently introduced a bill meant to guarantee due process of law to any health care provider accused of Medicaid fraud, in turn ensuring that the provider’s Medicaid patients continue to receive the care that they need during the state’s investigation.

U.S. Sens. Martin Heinrich (D-New Mexico) and Tom Udall (D-New Mexico), and U.S. Reps. Ben Ray Luján (D-New Mexico) and Michelle Lujan Grisham (D-New Mexico) introduced the Medicaid Program Integrity Enhancement Act of 2016 on March 18.


The lawmakers were inspired to introduce the legislation after the New Mexico Human Services Department (HSD) suspended Medicaid payments to 15 behavioral health providers claiming allegations of fraud almost three years ago. The move disrupted care to some of the most vulnerable residents in the state, but since then, 13 of the providers accused of fraud have been found innocent.

Additionally, the First Judicial Court of New Mexico ruled that HSD violated the due process rights of several of the providers when it withheld payments indefinitely, without a chance to appeal the state’s decision.

“New Mexico’s behavioral health system was turned upside down overnight when the state unilaterally suspended Medicaid payments for vital services,” Heinrich said in a prepared statement. “It’s clear that this was a manufactured crisis that dangerously left patients without the care they deserved and had come to rely on. Our bill would ensure this never happens again.”


The state’s decision to suspend Medicaid payments without notice forced multiple trusted providers to shut their doors, leaving patients at risk without the services they depend on, Udall said. “Our bill puts a simple principle in place: patients over politics,” he explained.

Specifically, the Medicaid Program Integrity Enhancement Act of 2016 is designed to prevent unnecessary payment suspensions by requiring a Medicaid agency to consult with a state attorney general on the credibility of allegations before suspending payments.

Additionally, the bill is meant to protect beneficiary access to care by requiring a state to consider the effect a payment suspension might have on beneficiary access to care, before withholding payments. The bill also ensures due process of law by requiring states to end payment suspensions where an investigation has ended after 18 months, and it requires states to establish an appeal process for providers to challenge charges against them.

“Investigating fraud and providing access to quality health care to patients are not incompatible,” Heinrich said. “The bill will ensure that both goals can be achieved simultaneously.”

Written by Mary Kate Nelson

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