Medicaid Integrity Partnership with State Flexibility and Five-Year Sunset

Congress has power to set clear conditions on federal Medicaid funds under Article I, Section 8, Clause 1, and the Tenth Amendment reserves day-to-day administration of Medicaid to the states. This draft therefore conditions funds on a limited annual review and report, without giving federal officers control over state staffing, contracting, or eligibility decisions. The strongest objection is that even light reporting can become coercive paperwork; this draft answers it with a fixed standard form, a cure period, a cap on any fund hold, and a five-year end date unless Congress votes to extend. Each state Medicaid program would complete one fraud risk review each year. The review would cover fee-for-service claims, managed care entities, and eligibility and enrollment systems. States would use existing program integrity data where practicable, including findings from Medicaid fraud control units. The Centers for Medicare and Medicaid Services would publish plain written guidelines on high-risk areas and accepted review methods. Each state would then adopt a focused correction plan tied to what its review found. The plan would list the top risks, the specific fix for each risk, the office responsible, and the date for completion. States would report results to CMS once per year in a standard format. CMS would compile the state reports into one public annual summary for Congress. The summary would show national trends and state progress without directing state staffing or contracting choices. Strong safeguards would protect patients, providers, and state authority. VFA proposes these notice and review protections as new safeguards in this draft. No person who is eligible would lose coverage based only on a risk score or a system flag. Any payment hold, enrollment denial, or provider exclusion proposed under this program would require written notice and an opportunity for prompt review. Federal funds could not be used for broad data matching beyond the stated fraud-prevention purpose. Costs and federal power would be capped. VFA proposes a federal support cap of $40 million per year, subject to appropriations. VFA proposes that if a state report is incomplete, CMS would first offer help and a cure period. VFA proposes that only after notice and a hearing opportunity could CMS hold a capped share of federal administrative funds until the state files a complete report. VFA proposes the authority would end after five years unless Congress reviews results and votes to extend it.