Department of Health Officials Missed Main Message of Medicaid Behavioral Health Audit

Legislative Auditor Daryl Purpera said Friday that a recent Louisiana Department of Health (LDH) press release critical of an audit report on the Medicaid behavioral health program focused only on one aspect of the findings and failed to acknowledge the report’s main message.

The audit report, which was released Monday, contained findings related to $47.5 million in claims and encounters that were billed improperly in the Medicaid behavioral health program. LDH’s response focused on the finding that more than $9 million of the $47.5 million was paid out for encounters and claims that exceeded rates allowed by the fee schedule.

In their press release, LDH officials said the managed care organizations (MCOs) and Magellan Health Services were allowed to contract with behavioral health care providers for fees that exceed the Department’s fee schedule to help ensure Medicaid enrollees have access to care.

However, Purpera said, the $9 million figure cited in the audit report does not include the special rates the MCOs and Magellan negotiated with providers that exceeded the fee schedule. According to officials with four of the five MCOs and Magellan, their contracted providers were required to follow LDH’s fee schedule. In addition, the MCOs that were sent examples of the issues identified in the report agreed that the examples were errors.

Purpera said his bigger concern was that LDH did not address the audit report’s primary message in its press release. That message, he said, was that the MCOs, Magellan, and LDH made $38.5 million in improper payments between December 2015 and June 2019 because they did not ensure the encounters and claims for behavioral health services used the proper procedure and modifier codes so that the correct rates could be paid.

In both instances, auditors recommended that automated edit checks be established to track the behavioral health claims to ensure they comply with the fee schedule, and, in both instances, LDH disagreed with the recommendations.