Health Care

Kaitlyn Finley | November 28, 2018

Poor Medicaid audits cost Louisiana as much as $85 million

Kaitlyn Finley

Earlier this month, state auditors discovered the Louisiana Department of Health (LDH) may have spent up to $85 million on ineligible Medicaid enrollees. Top Louisiana representatives, including U.S. Sen. John Kennedy, have called for the resignation of LDH Secretary Rebekah Gee in response to the audit.

In July of 2016, Louisiana expanded its Medicaid program under Obamacare to include a new category of low-income individuals—able-bodied, working-age adults. In their report, state auditors found that since 2016 LDH did not properly track and verify new expansion enrollees’ income eligibility. Instead, enrollees were allowed to self-report wage changes throughout their first year in the program. Using this system, LDH was not able to remove individuals who might have changed jobs or received pay raises, possibly making them ineligible for Medicaid benefits.

During their assessment, state auditors conducted income checks on 100 random Medicaid expansion enrollees. They found 82 individuals were ineligible because their wages exceeded the monthly income limit. The auditors calculated Louisiana spent $382,000 on medical services and fees on these 82 ineligible recipients.

Based on this random sample, auditors project the state may have paid between $61.6 million and $85.5 million for ineligible Medicaid expansion recipients from July 2016 through March 2018.

To improve LDH’s Medicaid audit system, the auditors recommended LDH should increase the frequency of income checks and integrate quarterly wage data available from the Louisiana Workforce Commission in its checks. More states, including Oklahoma, are moving from annual checks to quarterly wage checks to weed out fraud and overspending in state Medicaid programs.

LDH was recently criticized for other failures due to weak audits and poor financial management. This past July, state auditors found LDH failed to deposit $2.8 million into the Medicaid Fraud Fund in accordance with state law. In another report this year, state auditors revealed LDH did not have sufficient systems in place to accurately monitor claims from Medicaid providers. State auditors reported LDH paid out $136 million in claims from 2012 to 2017 to health care centers that were no longer participating providers in the state’s Medicaid system.

The audit findings in Louisiana show why more vigorous audits and oversight are necessary for state Medicaid programs to focus tax dollars on those in most need.

Kaitlyn Finley Policy Research Fellow

Kaitlyn Finley

Policy Research Fellow

Kaitlyn Finley currently serves as a policy research fellow for OCPA with a focus on healthcare and welfare policy. Kaitlyn graduated from the University of Science and Arts of Oklahoma in 2018 with a Bachelor of Arts in Political Science. Previously, she served as a summer intern at OCPA and spent time in Washington D.C. interning for the Heritage Foundation and the U.S. Senate Committee on Environment and Public Works.

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