Department of Health Paid $943,274 in Monthly Medicaid Fees for Recipients No Longer in Louisiana
The Louisiana Department of Health paid out at least $943,274 and possibly as much as $2,434,826 in monthly fees for Medicaid recipients who no longer live in the state, the Legislative Auditor said in a report released today. The payments occurred between February 2012 and May 2016.
Prior to 2012, the department operated under a fee-for-service Medicaid model in which it paid all claims. Between 2012 and 2014, the department moved to a managed care model for most acute care, behavioral health, and dental services. Under the managed care program, the department pays a per member per month fee to five private insurance companies that oversee the care of Medicaid recipients and pay the Medicaid claims.
One of the requirements for Medicaid eligibility is residency in the state. In examining the department’s Medicaid records, financial auditors found that, between 2012 and 2016, 13,141 enrollees had no claims activity. In addition, 413 of these recipients had out-of-state addresses listed in the department’s Medicaid eligibility files. Auditors tested a sample of 160 of the 413 and determined that all 160 recipients were living outside of the state and therefore were not eligible for Louisiana Medicaid coverage, the state auditor said. Under managed care, even though these recipients were out-of-state and receiving no services in Louisiana, the state still paid the full monthly Medicaid cost for them. In some cases, these erroneous monthly payments continued for years.
Among the weaknesses auditors noted in the department’s processes for verifying that Medicaid enrollees meet residency requirements were: