LDH Potentially Paid Up to $85.5 Million More in Fees Than It Should Have for Ineligible Medicaid Expansion Recipients

An examination of the Louisiana Department of Health’s (LDH) wage verification process for the Medicaid expansion population found the Department may have paid between $61.6 million and $85.5 million more than it should have in per member per month fees to the managed care organizations overseeing the program because the recipients were not eligible for coverage.

Auditors compared Medicaid data obtained from LDH to quarterly wage data obtained from the Louisiana Workforce Commission (LWC) to determine if LDH paid per member per month fees for Medicaid recipients in single-person households who were ineligible for benefits. The comparison identified 19,789 recipients who had average wages that appeared to exceed the allowable amount to qualify for Medicaid.

In looking at a random sample of 100 Medicaid recipients, auditors found 82 of them did not qualify for $382,420 (47.3 percent) of the $808,341 in per member per month fees LDH paid on their behalf. Because this sample was random, auditors were able to project these results to the entire population of single-person household Medicaid expansion recipients.

Based on this projection, it appeared LDH could have paid between $61.6 million and $85.5 million in per member per month fees for Medicaid recipients who did not qualify at some point during their Medicaid coverage.

In addition, auditors also examined a target sample of 100 Medicaid recipients and found 93 who did not qualify for $538,795 (66.3 percent) of the $813,023 in per member per month fees LDH paid on their behalf at some point during their coverage. This happened, in part, because LDH relies on Medicaid recipients to self-report changes in their wages.

LDH’s decision to be a Federally Facilitated Marketplace (FFM) determination state also contributed to the number of ineligible recipients. As part of the Affordable Care Act, individuals who need health insurance can apply through the FFM. If the FFM determines the person’s income qualifies the applicant for Medicaid, the case is sent to the state. However, the FFM does not have access to LWC wage data, meaning it makes eligibility determinations without a full picture of an applicant’s wages. Errors on the part of LDH caseworkers played a role as well in payments continuing to be made for ineligible recipients.