Audit: State may have spent $85M on people not eligible for Medicaid

BATON ROUGE (AP) — Louisiana’s health department may have spent as much as $85 million over 20 months for people enrolled in the Medicaid expansion program who didn’t qualify for the government-financed coverage, according to an audit released Tuesday.
Legislative Auditor Daryl Purpera’s office found problems with the agency’s infrequent use of wage data from the state labor department to determine eligibility.
The report says since Gov. John Bel Edwards expanded the state’s Medicaid program in July 2016, the department has relied on Medicaid recipients to self-report changes in their paychecks in the 12-month period between the initial application for Medicaid and coverage renewal.
Auditors suggested more frequent checks using available state wage data should be used to ensure Medicaid recipients aren’t earning more than allowed to qualify. Pennsylvania, Wisconsin and other states do quarterly reviews to check eligibility against income data, the report says.
The report also found errors in the work done by health department caseworkers. In addition, auditors said the agency didn’t double-check income information when federal officials determined people who applied for individual marketplace insurance coverage through the Affordable Care Act were instead deemed eligible for the Medicaid expansion program. Those federal officials don’t have access to state wage data, the report says.
“Without a sufficient process to determine recipient eligibility, LDH cannot ensure that Medicaid dollars are spent appropriately,” Purpera wrote to legislative leaders in the audit.
The health department said it follows a federally approved verification plan for checking Medicaid recipients’ income when a person applies for the program and renews coverage yearly. It didn’t outline plans to try to recoup money spent for people ineligible during their coverage.
But Health Secretary Rebekah Gee said the agency was upgrading its system to improve eligibility reviews.
“After more than three years of development, the department has launched a new automated system for Medicaid eligibility and enrollment that will improve customer service, boost efficiency and increase the accuracy of eligibility decisions,” Gee said in a statement.
Purpera’s office used a random sample of 100 Medicaid recipients in the expansion program, to check if their income exceeded the threshold for eligibility. Auditors found 82 didn’t qualify for 47 percent of the monthly payments the health department made to Medicaid managed-care companies for their health care coverage from July 1, 2016, through March 31, 2018.
The monthly fee paid per ineligible recipient averaged $3,824, the report says.
Projecting those results across the entire Medicaid expansion population, auditors wrote, suggests the health department spent anywhere between $61.6 million and $85.5 million on people who weren’t eligible for Medicaid coverage.
More than 480,000 working poor and other nonelderly adults in Louisiana are enrolled in Medicaid through the expansion program. Adults ages 19 to 64 with incomes up to 138 percent of the federal poverty level — about $16,750 for a single adult or $28,680 for a family of three — are eligible for the coverage.
The federal government is paying most of the Medicaid expansion cost. Louisiana is paying a share that eventually increases to 10 percent. Lawmakers passed financing tools to help cover the state’s costs, including a tax hike charged on health maintenance organizations.
Gee said her department’s new computer system to double-check eligibility will connect with state and federal databases to have real-time verification of citizenship, income and disability information.
If anyone is found to have intentionally misrepresented income levels, that information will be sent to law enforcement agencies for possible prosecution, the health department said.