Louisiana state auditor critical of Department of Health

(The Center Square) – Louisiana’s government auditing agency cited the Department of Health for the single largest amount of waste in the watchdog’s recently released fourth-quarter report for fiscal year 2021.

The Louisiana Legislative Auditor is tasked with identifying taxpayer-funded waste, fraud and abuse across state and local government agencies. It’s required to relay findings of $150,000 or more to the legislature’s Joint Legislative Committee on the Budget, composed of bipartisan members from both the House and Senate.

According to the report ending June 30, the Department of Health failed to enroll and screen Healthy Louisiana managed care providers and dental managed care providers as required by federal regulations, auditors said. The total taxpayer-funded amount affected was $8.5 billion.

Healthy Louisiana is how most Medicaid and LaCHIP – government insurance for children – recipients receive health care services in the state.

“As a result, LDH cannot ensure the accuracy of provider information obtained from the Louisiana Medicaid managed care plans and cannot ensure compliance with enrollment requirements defined by law and the Medicaid and CHIP state plan,” the report concluded.

Auditors also found inadequate billing controls for behavioral health services, which undermined the ability to deny improper Medicaid and LaCHIP claims. A dollar amount was not attached, though the same finding was issued last year at a cost of $10.5 million.

The Department of Health has struggled to meet mandatory requirements for the Medicaid and LaCHIP state-federal partnership programs over the past few years. A legislative auditor report in April found the state health agency had made progress in certain areas but continued to lag overall.

Notably, 10% of sampled case records did not support program eligibility decisions.

“We consider these costs to be questioned costs,” auditors said.

In a response letter, Department of Health Secretary Courtney Phillips insisted the agency was in compliance with federal eligibility rules and committed to increasing caseworker training.

Phillips did not dispute the legislative auditor’s finding of noncompliance regarding managed care provider enrollment. She explained the department began working with an outside screening and verification vendor in 2019 but fired the vendor because of multiple missed deadlines.

“LDH is proceeding with an alternate approach to become fully compliant by mid-year 2021, assuming there is little impact to the timeline due to the COVID-19 crisis,” Phillips said in April.

The recent legislative auditor report maintained the Department of Health still was not in compliance.

The report also cited the Louisiana Workforce Commission for failing to properly account for Unemployment Trust Fund money and properly disburse benefits through the Unemployment Insurance Program.

“Federal revenue and amounts due from the federal government were understated by $65.2 million because LWC did not properly accrue federal unemployment insurance benefits received after fiscal year-end,” auditors said.

Auditors also determined the agency understated unemployment benefit spending and related liabilities by $46.5 million as well as $17.7 million in cash because of errors, omissions and other reporting problems.

The LWC also made $6.2 million in improper payments to 1,195 incarcerated individuals and $1 million in improper payments to 374 deceased individuals, according to auditors.

While such sums are significant, they represent a small portion of the $8.57 billion in state and federal unemployment insurance benefits paid during the pandemic-fueled fiscal year 2021.

The legislative auditor also cited Louisiana State University Health Sciences Center in Shreveport for noncompliance regarding joint venture agreements and “control weakness” related to billing and collections. The combined dollar amount attached was $6.2 million.

The Department of Public Safety and Corrections was cited for spending $1.6 million in COVID-19 emergency funding on items outside the scope of allowed expenses.

In a response letter, Department Secretary James LeBlanc said the department had followed guidance provided by the Louisiana Division of Administration, the state’s financial management arm.

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