Kentucky Did Not Correctly Determine Medicaid Eligibility for Some Newly Enrolled Beneficiaries

Kentucky did not always determine Medicaid eligibility in accordance with Federal and State requirements. Of our sample of 120 beneficiaries, Kentucky correctly determined eligibility for 111 beneficiaries, but it did not determine eligibility for the remaining 9 beneficiaries in accordance with Federal and State requirements. Specifically, Kentucky did not always electronically or manually verify income and citizenship. In addition, although it did not violate an eligibility requirement, Kentucky did not perform, or maintain documentation of, identity-proofing for 40 beneficiaries in accordance with Federal requirements. The Federal identity-proofing requirements are intended to reduce the potential for identity theft.

Kentucky did not always meet Federal and State requirements when making eligibility determinations because of human and system errors. As a result, we estimated that Kentucky made Federal Medicaid payments on behalf of 34,593 potentially ineligible beneficiaries totaling $105 million out of 464,814 total beneficiaries with payments of $1.49 billion. We did not include the identity-proofing errors in our estimate of potentially ineligible beneficiaries and payments, but we are highlighting the potential for identity theft if the State agency does not correct these errors.

We recommended that Kentucky redetermine, if necessary, the current Medicaid eligibility status of the sample beneficiaries for whom income or citizenship verifications did not meet Federal and State requirements; ensure that the enrollment system used to determine eligibility verifies income and citizenship data using available electronic data sources; and ensure that the enrollment system used verifies applicants' identity and maintains identity-proofing documentation for applicant filers. Kentucky agreed with our recommendations and described actions it had taken to address them.