Louisiana Cracks Down on Medicaid Fraud

Published May 31, 2016

A joint effort of Louisiana Department of Health and Hospitals (DHH) Secretary Alan Levine and Attorney General Buddy Caldwell to combat Medicaid fraud is yielding positive results for Louisiana taxpayers.

According to DHH, the use of a joint Medicaid Fraud Control Unit (MFCU) has allowed state officials to significantly expedite identification of improper payments from a total value of $1.9 million in 2005 and $1.4 million in 2007 to more than $6.2 million in the 2009 fiscal year.

DHH’s recovery rate via collections likewise increased from $1.6 million in fiscal year 2005 to $5.85 million in fiscal year 2009, with the total number of recoupments increasing from 234 incidents in 2005 to 516 in fiscal year 2009.

‘Pay and Chase’

According to Levine, who refers to Medicaid as a “pay and chase system,” the way Congress designed Medicaid sets the system up for fraud.

“Make no mistake, Medicaid Fraud is theft—theft from Louisiana taxpayers and from those who rely on the Medicaid program for their most basic health-care needs. Louisiana is pleased to be on the cutting edge of fighting Medicaid fraud and finding more effective and efficient ways to deliver health care to the neediest among us,” Levine said.

Under the Medicaid system, bills are received by providers and then processed and paid. It is only after the payment process is completed that controls kick in, leaving states such as Louisiana in the position of having to chase after recipients of erroneous and fraudulent payments.

“We are focused on finding people who try to steal from the taxpayers, and are aggressively pursuing them,” said Caldwell.

National Problem, State Solution?

President Obama’s administration earlier this year reported more than $55 billion in improper payments were made via Medicaid and Medicare in 2009 alone, and a Government Accountability Office study released last year found improper payments accounted for more than 10 percent of Medicaid’s payouts in fiscal year 2008.

According to a source within the Louisiana DHH, Levine’s long-term plan involves more than just a law enforcement component.

“Ultimately our real solutions will come with the transformation of Medicaid in Louisiana—a transformation currently under development that will begin its rollout in January,” the DHH staffer said. “We’re working on a project that will transform Medicaid in Louisiana from a fragmented, fraud-laden, fee-for-service system toward a model that more closely resembles the private market, where enrollees choose a provider network that then becomes accountable for their care—and for the payment of their care.”

Few details of Levine’s plan have been released to the public, but the DHH staffer says the transformative project will include mandatory fraud detection controls, which will for the first time leverage provider partners against fraud instead of putting enforcement entirely at the discretion of government officials.

“I’m still extremely wary of a system that not just allows but really enables this kind of fraud to take place,” Levine said. “The fee-for-service model makes defrauding the Medicaid system too easy. That’s why we need to change the system.”

Tabassum Rahmani ([email protected]) writes from Dublin, California.


Internet Info:

Government Accountability Office Study: Medicaid Fraud


Center for Health Transformation: Medicaid Fraud News