Auditor: State pays Medicaid coverage fees for dead people

The state health agency paid out $1.85 million for Medicaid health insurance coverage for more than 1,700 dead people during a recent 16-month period, according to a legislative auditor’s report issued Monday.

The payments went to private firms administering the Bayou Health and Behavioral Health Partnership initiatives between Feb. 1, 2012, and June 30, 2013, which was the end of the state’s fiscal year. “Approximately 53 percent of these payments were for participants who died before the programs began,” stated the report from the Office of the Louisiana Legislative Auditor.

The auditor’s office stated the health agency did not have a sufficient process in place for timely identifying deceased Medicaid participants.

“Some of the payments identified may have occurred because DHH automatically enrolled participants who were Medicaid eligible prior to February 2012 into the new programs without verifying whether or not they were deceased,” the auditor concluded.

“We had a flaw in our process of determining eligibility,” Legislative Auditor Daryl Purpera said Monday. “The department is changing the process.”

Department of Health and Hospitals Secretary Kathy Kliebert said Monday that the problem occurred because DHH was relying on “a very sloppy database in Social Security” to determine who should be enrolled in the managed care plans. Most of the cases involved older adults with disabilities qualifying for Medicaid through the Social Security system, she said.

“In the future we are going to be using our vital records database,” she said, referring to the state’s registry of birth and death records.

Kliebert stressed that the state made the erroneous payments. They were not a result of billings by companies participating in Bayou Health and the Behavioral Health Partnership, she said.

Kliebert said the state will recover the funds covering about 1,300 of the individuals this month, with the remainder being paid back in February.

In a written response, Ruth Kennedy, the state Medicaid director, stated that the $1.85 million overpayment identified by Purpera’s office “represents a tenth of one percent of the total per member per month premiums paid during the review period.”

Kennedy said DHH’s Bureau of Health Services Financing is reviewing the records used by Purpera’s office to make sure that the correct date of death is entered into the Medicaid eligibility system. She said the bureau would do a quarterly review of the death dates in the future.

The Jindal administration moved the management of medical and behavioral health programs to the private sector starting in February 2012 with the idea of lowering costs and improving the health of those enrolled in Medicaid — the government’s health insurance program for the poor.

About 1.4 million Louisiana residents are enrolled in Medicaid, which is administered by DHH.

Two-thirds of Louisiana’s Medicaid recipients are enrolled in Bayou Health, primarily children and pregnant women. More than 1 million residents are enrolled in the Behavioral Health Partnership.

The two programs account for a large share of Louisiana’s $7 billion-plus Medicaid spending.

The legislative auditor compared payments made through the programs to death records in the state health agency’s Center of State Registrar and Vital Records.

The comparison identified $1,849,474 in participant fees for deceased individuals.

Eight-six percent of the erroneous payments went to companies involved in the Bayou Health program. The bulk of the money went to three private insurance companies that were paid premiums a set per member per month payment for care of Medicaid recipients enrolled in Bayou Health.

LaCare received $598,964; Louisiana Healthcare Connections Inc., $527,341; and Amerigroup Louisiana Inc., $441,216. Lesser amounts went to managed care entities that opted for a “fee for service” method of reimbursement, UnitedHealthcare of Louisiana Inc., $15,625 and Community Health Solutions of America, Inc., $8,364.

The remaining 14 percent overpayment or $257,964 went to Magellan Health Services, the manager of Louisiana’s Medicaid behavioral health services.