Audit Pressure Grows Over Medicaid Improper Payments Tied to Intake Gaps

As CMS, GAO, and HHS OIG intensify scrutiny of Medicaid improper payments, new federal data shows billions in annual exposure tied not to fraud headlines—but to eligibility documentation and intake failures. AmeriTrust Solutions says the problem begins at the "front door" of enrollment, where incomplete, inconsistent, or unverified applications create compliance risk that states must later defend.

WASHINGTON, April 21, 2026 /PRNewswire/ -- Federal oversight pressure is escalating around Medicaid improper payments, with recent reports from Centers for Medicare & Medicaid Services (CMS) showing billions in annual payment errors across Medicaid and CHIP programs. In FY2025, CMS estimated $37.39 billion in Medicaid improper payments, and said 77.17% were tied to insufficient documentation rather than fraud, underscoring how much payment risk begins with application quality and file support at intake. While public debate often centers on intentional fraud, federal audits find eligibility determination errors, particularly income verification, household composition documentation, and insufficient file support, are also consistent key contributors

Under the Payment Error Rate Measurement (PERM) program, states are frequently cited not because benefits were intentionally misdirected, but because eligibility files lack complete or defensible documentation. Recent audits from the Department of Health and Human Services (HHS) Office of Inspector General reinforce how documentation and verification gaps, not partisan narratives, are at the center of compliance findings.

"Billions in improper payments are often the result of unintentional errors in applications built on incomplete, incorrect, or outdated information," said Peter Justen, Founder and CEO of AmeriTrust Solutions. "Strengthening accuracy and verification at intake is a practical way to reduce that risk without assigning blame."

Oversight Is Intensifying

In January 2026, CMS released updated improper payment data for Medicaid and CHIP, underscoring ongoing federal scrutiny around eligibility accuracy and documentation sufficiency.

Testimony from the Government Accountability Office (GAO) before House oversight committees has emphasized data quality, verification controls, and cross-agency data sharing as central to preventing improper payments. At the same time, watchdog reporting has drawn national attention to improper payments made due to incomplete files, weak verification, and insufficient controls.

These problems no longer indicate just an operational modernization issue. Eligibility-related improper payments place federal funds under scrutiny and elevate accountability concerns at both the congressional and agency level. For states and healthcare systems, the same intake gaps create measurable financial exposure and compliance risk.

The Preventable Failure at Scale

Medicaid improper-payment exposure often begins before a file ever reaches the state system. When applicants or intake teams have to manually work through long, repetitive applications and re-enter information that can already be sourced from trusted third-party data, the result is predictable: more incomplete submissions, more inconsistencies, more rework, and more documentation-related errors that later surface in audits and payment reviews.

AmeriTrust Solutions says the avoidable failure is not just what happens after payment. It is what happens at intake. By improving data quality before submission, the company argues states and providers can reduce downstream administrative burden, strengthen audit defensibility, and limit improper-payment exposure without replacing existing eligibility infrastructure.

The Compliance-Aligned Approach

AmeriTrust Solutions positions itself not as a critic of state systems, but as a compliance-aligned process-improvement layer that strengthens how Medicaid applications begin. This approach can reduce application complexity by roughly 90%, from more than 200 questions to approximately 20 to 25, while helping agencies receive cleaner, more complete submissions the first time. Rather than relying primarily on an after-the-fact pay-and-chase model to identify and recover improper payments, AmeriTrust Solutions is focused on reducing the documentation gaps and intake errors that create payment risk upstream.

At intake, the company uses applicant-authorized data access to prefill applications with trusted, verified, third-party data and guides applicants through only the questions relevant to their circumstances. Prefilling an application ensures:

• Income, household, and identity-related fields are pre-filled using trusted data sources.
• Applicant consent for use of that data is digitally captured.
• Gaps or anomalies are flagged, so submissions are cleaner and easier for agencies to process within existing workflows.

"Too much of the system still tries to find and recover improper payments after the money has already gone out," said Justen. "The better approach is to reduce the bad inputs that create that exposure in the first place. If you improve the application at intake, you improve everything upstream."

Financial Stress on Rural Hospitals Raises the Stakes

Oversight agencies have signaled that improper payment measurement will continue to evolve, with increased focus on data integrity, verification controls, and managed care oversight.

Because Medicaid is a national program and PERM rolls findings across all states over a three-year review cycle, eligibility accuracy is a national fiscal and healthcare stability issue, particularly for providers already operating under reimbursement and administrative pressure.

Improper payment findings do not end with a federal report. They cascade into hospital revenue cycles, triggering documentation reviews, repayment risk, administrative reprocessing, and strained payer relationships. What begins as an eligibility intake gap often ends as financial instability inside provider systems.

As GAO testimony has noted, preventing improper payments depends on strengthening verification and data-sharing controls upstream. For Justen, that means modernizing the intake front door, not replacing entire state systems at the back.

AmeriTrust Solutions is engaging with state Medicaid leaders, rural hospital systems, federal policymakers, and oversight stakeholders to demonstrate how trusted third-party verification can reduce improper payment exposure without increasing administrative burden.

About AmeriTrust Solutions

AmeriTrust Solutions is a Medicaid eligibility modernization company focused on improving enrollment accuracy at the point of intake. Built from lived experience navigating Medicaid bureaucracy and refined alongside rural hospitals and state eligibility operators, AmeriTrust Solutions integrates consent-based data verification into existing state systems without requiring full infrastructure replacement. By reducing documentation gaps and administrative friction, AmeriTrust Solutions helps protect public funds, stabilize hospital revenue cycles, and strengthen compliance defensibility under federal oversight. Visit https://ameritrustsolutions.com/

Sources

• Centers for Medicare & Medicaid Services. "PERM Error Rate Findings and Reports." Jan. 20, 2026. cms.gov/data-research/monitoring-programs/improper-payment-measurement-programs/payment-error-rate-measurement-perm/perm-error-rate-findings-and-reports
• Centers for Medicare & Medicaid Services. "Fiscal Year 2025 Improper Payments Fact Sheet." Jan. 15, 2026. cms.gov/newsroom/fact-sheets/fiscal-year-2025-improper-payments-fact-sheet
• HHS Office of Inspector General. "Audit Finds Maine Made at Least $45.6 Million in Improper Medicaid Payments for Autism Services." Jan. 22, 2026. oig.hhs.gov/newsroom/news-releases-articles/hhs-oig-audit-finds-maine-made-at-least-456-million-in-improper-medicaid-payments-for-autism-services/
• U.S. Government Accountability Office. "Medicaid Managed Care: Improper Payment Estimate." June 26, 2025. gao.gov/products/gao-25-107770
• U.S. Government Accountability Office. Written Testimony Before the House Oversight Committee. Jan. 13, 2026. oversight.house.gov/wp-content/uploads/2026/01/Thomas-GAO-Written-Testimony.pdf
• KFF. "A Look at the Medicaid Payment Error Rate Measurement (PERM) Program." Feb. 13, 2026. kff.org/medicaid/a-look-at-the-medicaid-payment-error-rate-measurement-perm-program-and-upcoming-changes-and-impacts/

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SOURCE AmeriTrust Solutions