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The Arc of California is speaking out after the federal government announced a second deferral of Medicaid funding to California in just two months.
The U.S. Department of Health and Human Services (HHS) recently announced it is delaying approximately $867.5 million in Medicaid payments to California while it reviews certain claims. The announcement follows a separate funding deferral issued in May, raising ongoing concerns about the stability of services that thousands of Californians with intellectual and developmental disabilities rely on every day.
Although federal officials have described the action as part of an effort to address fraud, waste and abuse, The Arc of California is concerned that the government has not presented evidence demonstrating that the deferred California claims are fraudulent. In fact, the Centers for Medicare & Medicaid Services (CMS) states that improper payment rates are not fraud rates. Many payment errors involve documentation or administrative issues rather than intentional misuse of public funds.
The Arc of California supports strong oversight and accountability. Fraud should be investigated and prosecuted wherever it exists. However, people with disabilities and their families should not face uncertainty because of broad funding actions based on unproven allegations.
Many of the claims under review are connected to California’s In-Home Supportive Services (IHSS) and other Home and Community-Based Services (HCBS). These programs help people with disabilities and older adults remain safely in their homes instead of entering more costly institutional settings. They also support everyday activities like bathing, dressing, preparing meals, going to work and participating in community life.
“The federal government has not demonstrated that the hundreds of millions of dollars it is withholding represent fraud,” said Jordan Lindsey, Executive Director of The Arc of California. “CMS’s own guidance recognizes that documentation errors and improper payments are not the same as fraud. Californians with disabilities should not become collateral damage while the federal government attempts to prove allegations it has yet to substantiate.”
The Arc of California is urging HHS and CMS to provide greater transparency about the claims under review, clearly distinguish documentation issues from actual fraud, and release funding for claims that have not been shown to be improper.
Community living is not wasteful spending. It is one of Medicaid’s most effective investments, helping people with disabilities live independently while reducing reliance on more expensive institutional care.
Click HERE to read The Arc of California’s full press release.