Another audit raises Louisiana Medicaid oversight issues

Posted at 12:39 PM, Jul 30, 2018
and last updated 2018-07-30 13:39:51-04

BATON ROUGE, La. (AP) – Louisiana health and legal officials have failed to properly manage a fund that pays for investigations and prosecutions of health care providers accused of bilking the state Medicaid program, according to an audit released Monday, the latest of several reports criticizing Medicaid oversight.
The state’s health department and the attorney general’s office didn’t identify and deposit the required money into the Medicaid Fraud Fund, shortchanging the effort to combat fraud, the legislative auditor said in the report .
Auditors said about $3.5 million that should have been used to track and prosecute Medicaid fraud wasn’t deposited during the 2012 through 2017 budget years. The auditor’s office said the two agencies "lack an effective process to properly identify and deposit monies" into the fund as outlined in state law.
Both the health department and the attorney general’s office said the dollars were transferred to the fraud-detection fund as required, when the problems were identified by auditors.
Health department officials blamed policies of former Gov. Bobby Jindal’s administration for the improper diversion of $2.8 million in fines and penalties over the six-year period, saying corrective changes have been made under Gov. John Bel Edwards’ administration.
"We have been correcting a problem that was inherited from the previous administration, and that was brought to our attention by the auditor," Cindy Rives, chief financial officer for the health department, said in a statement Monday.
She added: "It is important to note that these funds were properly accounted for and reported every year."
Wilbur Stiles, chief deputy attorney general, wrote in his audit response that the office is changing its policies to ensure "accuracy of deposits" after the office deposited $713,000 less than it should have in the 2016 budget year.
The report also found the health department misspent more than $477,000 from the fund on salaries that didn’t appear to involve preventing and detecting Medicaid fraud and abuse. The agency said it’s correcting that issue. The health department used another $643,000 to pay for software that was unusable because it didn’t match agency computer systems, auditors wrote.
The report is the latest by Legislative Auditor Daryl Purpera’s office to raise issues about the management of Louisiana’s more than $12 billion Medicaid program.
In prior audits, Purpera’s office said the health department can’t verify the reliability of payments to health providers by the private companies that manage care for Medicaid patients; paid the managed-care companies for people who had moved away from Louisiana or had died; and doesn’t properly monitor the companies to ensure they provide enough specialists to treat Medicaid patients’ mental health and substance abuse problems.
Lawmakers are getting concerned with the array of findings, with the Senate health care committee planning a hearing next week to dig into the details.
The fund at issue in Monday’s audit is filled with fines, penalties and settlement dollars from Medicaid fraud and abuse cases, with dollars coming from both the health department and attorney general’s office. Any dollars left after reimbursing the Medicaid program for misspent money are supposed to be deposited into the fraud fund.

Today, the Health Department the following statement to the most recent audit: 

In its most recent audit of the Louisiana Department of Health and the Attorney General’s office about the Medicaid Fraud Fund, the Louisiana Legislative Auditor cited both agency’s management of the fund. The audit said both the state health department and the AG need to develop more effective processes to identify and ensure that the appropriate funds are deposited into the fund.

This is a valid finding by the Auditor, however, it is important to note four critical facts:

The Louisiana Department of Health, under this Administration, immediately took steps to begin correcting the problems as soon as they were brought to our attention.

The transfer of $2.79 million from one account to the Fraud Fund was made less than a month after the situation was recognized.
LDH is currently updating job descriptions and correcting how costs are allocated.

Fraud-fighting and fraud prevention efforts were never compromised.

In a response accompanying the audit, the Louisiana Department of Health said the core of this audit were policies that were in place prior to this administration in which Medicaid-related fines and penalties were classified as self-generated revenue.

Cindy Rives, LDH undersecretary, said when this administration learned from the Auditor that there were questions about the proper account in which to deposit these funds, LDH transferred the money from one account to the other. 

"We have been correcting a problem that was inherited from the previous administration, and that was brought to our attention by the Auditor," explained Rives. "Instead of depositing these funds into the Medicaid Fraud Fund, the process had been to deposit the funds into another account in the agency. It is important to note that these funds were properly accounted for and reported every year."