Audit reveals Medicaid spending on inmates

Advocate staff photo by PATRICK DENNIS --  The Louisiana State Capitol Show caption
Advocate staff photo by PATRICK DENNIS -- The Louisiana State Capitol

The state wrongly paid $2.7 million for Medicaid health insurance for prisoners over a nearly two-year period, according to a legislative auditor’s report released Monday.

The questionable spending occurred in the Jindal administration’s new privatized Medicaid programs — Bayou Health and the Behavioral Health Partnership.

The audit found the state Department of Health and Hospitals paid the private companies $2.68 million in “participant fees” for 2,736 incarcerated individuals in violation of federal Medicaid policy. The improper payments occurred between Feb. 1, 2012, and Dec. 31, 2013.

Legislative Auditor Daryl Purpera’s office had earlier found DHH making Medicaid payments for dead people during the same period.

A November 2013 report identified $1.85 million in payments for Medicaid health insurance coverage for more than 1,700 dead people.

DHH Chief of Staff Calder Lynch said Monday that the agency has been working on rectifying the problem, developing an electronic notification system through which corrections officials provide information when an inmate arrives and leaves prison.

“Even as we improve that flow of information, we are also recouping those dollars,” Lynch said.

In the latest report, the auditor placed the blame on DHH, which is responsible for determining participant eligibility and enrollment.

“DHH does not have a sufficient process in place for identifying incarcerated Medicaid participants in a timely manner,” the auditor said. “In addition, 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 incarcerated.”

The Bayou Health program covers two-thirds of Louisiana’s 1.4 million Medicaid recipients. It was launched in February 2012. The other program, Behavioral Health, provides mental health and addictive disorder services.

Of the improper payments, $2.22 million went to the five companies associated with Bayou Health and $465,088 to Magellan Health Services — the sole manager of the Behavioral Health Partnership.

The auditor cited a letter from the Center for Medicaid State Operations, which states that Medicaid funds cannot be used to provide medical services to inmates except when they are a patient in a medical institution.

In a letter to Purpera, DHH Medicaid Director Ruth Kennedy concurred with the audit findings.

In September 2013, DHH implemented “system changes” to exclude prisoners and those who become incarcerated from the two programs, Kennedy said. “The Department began receiving a weekly file from the Louisiana Department of Corrections of incarcerated individuals which is then matched with active Medicaid recipients. … ” Kennedy wrote.

DHH also is working to recover the overpayments, she said. The project is expected to be complete by Aug. 31, Kennedy said.

Follow Marsha Shuler on Twitter, @MarshaShulerCNB. For more coverage of the State Capitol, follow Louisiana Politics at http://blogs. theadvocate.com/politicsblog .