LDH, AG Lack Effective Processes to Identify Which Monies Should Go in Medicaid Fraud Fund

Auditors examining the Medical Assistance Programs Fraud Detection Fund found that both the Louisiana Department of Health (LDH) and the Office of the Attorney General (AG) lack adequate procedures to identify monies that should be deposited into the fund.

As a result, auditors said, LDH did not deposit approximately $2.8 million and the AG did not deposit $712,713 into the fund (more commonly known as the Medicaid Fraud Fund) in accordance with state law. Specifically, LDH did not deposit $2,797,768 in fines and penalties assessed between fiscal years 2012 and 2017 into the fund until February 2018.

In fiscal year 2016, the AG deposited $712,713 less than the amount indicated by its own memos. In addition, the AG could not provide memos to support $23,782 in deposits made into the fund between fiscal years 2013 and 2015.

LDH also incorrectly deposited $323,570 into the fund in fiscal year 2012 that should have been placed into the Nursing Home Residents’ Trust Fund. LDH staff told auditors that deposits into the Medicaid Fraud Fund made before fiscal year 2012 may also have been improper because the memos for these monies did not clearly specify where they were to be deposited.

Auditors found as well that LDH spent approximately $477,266 from the fund in fiscal year 2017 for salaries that did not appear to contribute to the prevention and detection of Medicaid fraud and abuse, as required by state law. In addition, LDH spent approximately $642,953 from the fund in fiscal year 2012 for software that could not be implemented because of system compatibility issues.

One of the purposes of the Medicaid Fraud Fund is to pay the state share of the operations of the AG’s Medicaid Fraud Control Unit (MFCU), which is responsible for investigating and prosecuting Medicaid provider fraud. Auditors noted that between fiscal years 2012 and 2017 the AG spent nearly $7.1 million from the fund for the MFCU in accordance with state law.