Mostly Medicaid warns actuaries Medicaid dollars are leaking

At the Society of Actuaries Health Meeting in Washington, D.C., Mostly Medicaid founder Clay Farris argued that only about half of each Medicaid dollar reaches members and urged actuaries to take a bigger role in stopping fraud, waste and abuse. The session highlighted rising enforcement actions, unresolved definitions and a call for the profession to set baseline measurements for the problem.

Why it matters: - Farris said Medicaid loses a major share of spending to fraud, waste, abuse and profiteering, which affects how much funding actually reaches member services. - The session challenged actuaries to move beyond modeling and help identify payment-system weaknesses before more dollars are lost. - Farris argued that the profession needs a baseline estimate for fraud, waste and abuse so policymakers and analysts can measure the problem more clearly.

What happened: - Clay Farris, managing partner and founder of Mostly Medicaid, joined actuary Colby Schaeffer on Monday, June 29, for Session 5B: Medicaid Fraud Risk — Best Practices & Professionalism at the Society of Actuaries Health Meeting in Washington, D.C. - Gregory G. Fann moderated the session, which reviewed definitions and trends for fraud, waste and abuse in Medicaid. - Farris estimated that only about 50 cents of every Medicaid dollar actually reaches member services. - Farris said weak definitions and weak accountability have allowed fraud, waste and abuse to be built into capitation rates.

The details: - Federal regulation 42 CFR § 455.2 defines fraud and abuse, but the rule does not define waste. - Farris said the existing fraud and abuse definitions are inadequate. - Farris pointed to abuse involving provider taxes and 340B as examples of gaming Medicaid systems for revenue maximization. - Schaeffer, founding partner and state Medicaid lead at incline Actuarial Group and a former chief actuary for Arizona’s Medicaid agency, said actuaries are often the first to see data that does not add up. - The session included a practical toolkit for spotting anomalies in data and escalating them appropriately.

Between the lines: - The presentation signaled that Medicaid integrity has shifted from a technical issue to a national enforcement problem. - Farris and Schaeffer framed actuaries as key gatekeepers because they sit closest to payment data and methodology, even if they are not fraud investigators. - The argument for baseline measurements suggests the field lacks a common way to separate fraud, waste and abuse, which makes accountability harder.

What's next: - Farris said actuaries have about six months to take a real leadership position on the fix. - He called on the Society of Actuaries to establish separate baseline estimates for fraud, waste and abuse. - The presenters said the profession should use the current enforcement wave as a window to act before the moment passes.

The bottom line: - The session’s message was blunt: Medicaid integrity problems are large, measurable and overdue for actuarial leadership.