Auditors Find Weaknesses in LDH System for Identifying, Tracking Improper Medicaid Payments

Auditors who evaluated the Louisiana Department of Health’s oversight of the Surveillance and Utilization Review Subsystem’s (SURS) program integrity activities found that weaknesses within the system have resulted in inaccurate or incomplete information.

Federal regulations require that all states have a surveillance and utilization review subsystem to identify suspicious provider billing patterns in their Medicaid programs. In Louisiana, LDH has a contract with DXC Technology, formerly Molina Medicaid Solutions, for the SURS function.

Auditors found that the system used to track improper payments does not contain accurate or complete information on cases. For example, the database does not include the actual amount of the improper payment identified, and it does not always provide a description of the violation.

In addition, since managed care began on February 1, 2012, SURS has focused primarily on improper payments in fee-for-service claims rather than claims filed through the five managed care organizations that handle the majority of Louisiana’s Medicaid program. SURS could strengthen its identification of improper payments by analyzing data across all MCOs.

For instance, auditors identified 110 providers that billed for more than 15 hours of service on at least one day across two or more MCOs. Those claims totaled $2,608,946 in Medicaid payments, which may indicate providers are billing for services not actually provided.

The amount of improper payments identified by SURS also has decreased, partly because of revisions to the Molina contract that reduced the number of cases SURS is required to close each year and partly because of the loss of the Recovery Audit Contractor. These changes resulted in a decrease in the amount of improper payments identified, from $5.9 million in fiscal year 2015 to $4.2 million in fiscal year 2017.

LDH also settled with providers in 11 of 30 improper payment cases auditors reviewed between fiscal years 2012 and 2017 for $321,729 less than the original identified improper payment amounts. However, no documentation was available to justify the reductions. Of these cases, two were settled for less than the federal share, which meant LDH had to use state funds to pay back the federal government. While state law allows LDH to settle cases, it also requires that the settlement amount cover the estimated loss to Medicaid.