HR-9422-119
Referred to the House Committee on Energy and Commerce.
Sponsored by Gus Bilirakis (R-FL)
What it does
This bill would amend the Social Security Act to require CMS to track and limit state exceptions to Medicaid Recovery Audit Contractor (RAC) programs, ending such exceptions after 2028 or 2029. It would require states to include Medicaid managed care plans in RAC reviews by 2028, set a four-fiscal-year lookback for audits, and require annual state and federal reports. It would also direct HHS to study barriers to state participation and run a five-year demonstration project to increase the number of states with RAC programs.
Who benefits
Federal and state taxpayers, if added audits recover improper payments. Recovery audit contractors, who typically are paid contingency fees and would gain a larger audit pool, including managed care claims. Congress and oversight bodies, which would receive more detailed state-level data. States that want better tools to identify overpayments and underpayments may also gain, as may providers who were underpaid, since the reports would track underpayments.
Who is hurt
Medicaid managed care organizations and health plans, which would face new audit and cooperation requirements and possible recoupment of payments. Hospitals, physicians, and other Medicaid providers, who may face more audits, longer lookback periods, and administrative burden in appeals. State Medicaid agencies, especially those with current exceptions, which would bear new reporting, contracting, and staffing costs. CMS would also need staff and resources to carry out the new monitoring and reporting duties.
Supporters argue
Supporters argue the bill implements recommendations from the Government Accountability Office, which found weak CMS oversight of RAC exceptions and limited recovery of improper payments. They contend that Medicaid has tens of billions of dollars in estimated improper payments each year and that managed care, now the main delivery channel, should not be exempt from audit. They argue that reporting, studies, and a demonstration project would give Congress better data on cost-effectiveness.
Opponents argue
Opponents argue the bill would add audit and compliance burdens on providers and plans, and that a four-year lookback could expose providers to demands for old claims after records have aged. They contend contingency-fee auditors may have incentives to pursue aggressive findings, a concern raised in Medicare RAC appeals where many denials were later overturned. They also argue the bill reduces state flexibility, and imposes unfunded administrative costs on states already stretched.
Constitutional context
Congress acts under the Taxing and Spending Clause (Art. I, §8, cl. 1) by attaching conditions to federal Medicaid funds, and states retain a choice under the coercion limit recognized in NFIB v. Sebelius (2012). Since the bill modifies conditions of an existing program rather than creating a new funding threat, a coercion claim seems unlikely, though the question is not settled for new conditions.
Checks and balances
Congress gains oversight data and sets binding conditions on state Medicaid plans, while HHS/CMS gains monitoring duties and limits on its discretion to approve exceptions; states retain contracting roles, and courts and appeals processes check audit actions against providers.
Historical precedent
The Affordable Care Act of 2010 (section 6411) first required states to establish Medicaid RAC programs, modeled on the Medicare RAC program, and CMS has since approved numerous state exceptions.