DHH's Management of Medicaid Payments, Food Vouchers, and Vaccine Program Questioned; $532 Million in Errors Submitted in Federal Reports

Over the past year, the Department of Health and Hospitals (DHH) paid two hospitals more than $17 million for uncompensated care costs that did not meet Medicaid requirements and included more than $532 million in errors in its quarterly report describing how it spent federal money.

For more than two years, DHH did not provide external quality review reports on the private company managing Medicaid’s behavioral health care at a cost of at least $330 million a year.

These are just some of the 14 findings contained in a legislative audit report released Monday covering the fiscal year ended June 30, 2015, and detailing challenges in managing the largest department in Louisiana state government.

The audit found that DHH did not renew a contract to identify and recover Medicaid claims where a third party is liable (TPL) for payment. The contract expired on December 31, 2014, without DHH contracting with another vendor or establishing other processes to identify and recover TPL. DHH’s past contactor estimated approximately $29 million in TPL receivables prior to the end of its contract that DHH had not recovered. DHH has not established any new possible TPL recoveries since December 2014.

DHH also paid claims totaling $349,085 to a provider of Non-Emergency Medical Transportation (NEMT) for services billed to Medicaid that were not provided in accordance with established policies. The legislative auditor stated "This is the second consecutive year that we have reported this questionable contractual agreement and the eighth consecutive year to report improper NEMT payments."

The audit found that DHH did not properly monitor the $105 million Special Supplemental Nutrition Program for Women, Infants and Children, or "WIC," program. The program serves 130,000 people each month.

The audit found that DHH did not monitor the federally-required audit of four WIC contract agencies that receive more than $500,000 annually. These four agencies received a total of $2.4 million in federal funds over the year and issued more than $17 million in redeemed WIC vouchers. Auditors said DHH also did not monitor WIC vendor prices to ensure competitive pricing or quarterly monitor, as required, WIC vendors who receive more than 50 percent of their revenue from WIC vouchers to make sure those vendors do not inflate their prices.

The state auditor also found that DHH did not adequately monitor how vaccines were stored and handled in the Immunization Cooperative Agreements program. In a test of 40 providers, auditors found DHH had not conducted compliance checks in two years for three of the providers who had been issued vaccines worth more than $294,000. Auditors said this could result in waste or potentially ineffective vaccines.

With regard to serving people with development disabilities, the audit found that, for the fourth consecutive year, DHH paid New Opportunities Waiver (NOW) Medicaid claims of more than $14,000 for waiver services that were not documented or billed according to Medicaid requirements. Auditors also noted that improper payments for these waiver services had been reported in 13 of the last 16 audits, totaling $595,016.

The audit also listed the top five Medicaid program expenditures during the year. These included $2.2 million spent on Bayou Health (the five private companies now managing Medicaid services); $943 million paid to nursing homes; and $908 million paid in private hospital Disproportionate Share (DSH) payments (a 1,231 percent increase in DSH payments since Fiscal Year 2011, mainly due to privatizing Louisiana’s charity hospital system).