La. auditor again raps health department’s spending oversight

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The Louisiana Legislative Auditor has questioned billions of dollars in Medicaid payments that the health department says complied fully with state and federal rules.

According to the auditor’s report, the Louisiana Department of Health made $4.8 billion in premium payments to the private companies that manage care for Medicaid recipients without first getting required contract amendment approvals. This may have violated state procurement rules, according to the report.

LDH also made $868 million in payments that may not have been based on actuarially sound rates, which could violate federal regulations, the LLA says. The issue, according to the report, is that while the department’s actuary certified rates for a particular time period, LDH paid those rates for services delivered outside of that time frame.

In its response, LDH didn’t dispute the timing of the payments or the rates that were paid. But it said there is a lag time between when the actuary certifies rates and when regulators approve those rates. Since the department is legally obligated to pay the managed care organizations in the meantime, it has to choose the most recently approved rate by either regulators or the actuary.

LDH says it adjusted payments based on future approvals, adding that the rates paid were appropriate and “there was no fiscal impact as a result of these actions.”

The auditor’s report raises 14 issues with LDH’s financial management during the fiscal year that ended June 30, seven of which were also raised the previous year. LDH concurred with some of the findings and disputed others.

One of the main sticking points continues to be how the department confirms that people receiving Medicaid benefits are poor enough to be eligible. The LLA suggests greater use of federal tax data.

LDH says it began using federal tax information in October in a “post-eligibility review process” when there is a big difference between the income someone reports when seeking to enter the Medicaid program and the income they reported to the IRS.

But the IRS rejected for security reasons LDH proposals to use federal tax information on the front end through its electronic eligibility verification system, the department says. But department Undersecretary Cincy Rives says LDH is willing to collaborate with the auditor’s office to address those limitations.