Once upon a time, Michigan, or rather the Divine Madame Maura Corrigan, conjured up this theory "gaming the system".
"Gaming the system" theory was then, liberally applied by the conservative think tanks as one of the new nomenclatures of "underground economy" (a.k.a. the poverty).
The policy construct was simple: Blame welfare recipients for the fraud in social welfare programs to distract the public from the contractual fraud.
What is the difference between the welfare gamers and Medicaid gamers? I am going to answer this. A welfare gamer is a person who trying to survive off state assistance of 200 percent below the poverty level, whereas, a Medicaid gamer is how the State's Departments scam the feds through taxes to make up for the hundreds of millions in Medicaid fraud penalties it has to pay back.
On May 27, 2014, the Michigan Legislature passed Senate Bill 913 to reduce to 0.75 percent a 1.0 percent health insurance claims tax intended to “game” the federal Medicaid system in ways that result in higher federal payments to Michigan’s medical welfare system. If a 6 percent use tax on Medicaid managed care providers proposed by Senate Bill 893 is disallowed by federal government for this purpose, then this bill would increase the rate of this levy to the original 1.0 percent.
On May 30, 2014, the U.S. Department of Health and Human Services determined under Medicaid rules, revenues from an impermissible health-care-related tax may not be used to finance the State’s share of Medicaid expenditures. However, by using revenues from this tax, Pennsylvania lowered its share of MCO capitation payments and increased the Federal share. During our audit period, the Federal Government paid $981 million for supplemental capitation payments designated to hold the Medicaid MCOs harmless. The MCOs received $1.6 billion in supplemental capitation payments to reimburse them for the Gross Receipts Tax, and Pennsylvania retained $1.1 billion of Gross Receipts Tax revenues in its Medicaid MCO fund. No additional services were provided and no additional beneficiaries were served with the proceeds from the Gross Receipts Tax. (Report below).
Whether or not Michigan intends to use the "gaming" winnings of the Medicaid tax on paying its Federal Financial Participation Rate, reimbursing the federal program for previous years penalties or providing more benefits to program participants is left opened for the state to clarify.
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