The Louisiana Department of Health and Hospitals left approximately $29 million on the table because it lacked the necessary mechanisms to recover claims from third-parties liable to pay for medical services provided for Medicaid recipients. The missed opportunity is one of many that Louisiana Legislative Auditor Daryl Purpera detailed in a speech to the Press Club of Baton Rouge earlier today.
Purpera spoke to the club about issues his office found regarding governmental waste and missed opportunities by state agencies to collect much needed dollars. His office issued the findings in a yearly report, as required by the state Legislature.
“There’s revenue out there. We need to collect everything that we’re supposed to collect,” Purpera said.
Louisiana is facing a massive budget hole of roughly $940 million this fiscal year and about $2 billion next fiscal year. Purpera acknowledged his office’s findings won’t help plug the budget this year, but he said addressing them will help the state in the long term.
Other areas in which the state needs to improve, according to Purpera: keeping funds, once collected, that are owned by state and local governments, and holding people and agencies accountable.
Purpera also said at least 5.9% of Medicaid claims are subject to fraud and abuse, but in Louisiana the figure could be as high as 10%. Purpera says he doesn’t have real numbers on the amount of Medicaid fraud and abuse in Louisiana, but the federal government estimates that it’s substantial, he says.
Purpera said his office intends to embed more auditors within DHH in an effort to stop potential Medicaid fraud and waste.
He said the department left the aforementioned $29 million on the table after it allowed a vendor contract that identified and recovered claims previously paid through Dec. 31, 2014 to expire. DHH did not renew it once it lapsed. It also did not contract with another vendor to establish internal processes to recover the claim payments, Purpera says.
The money wasn’t collected in 2015, he says.
“It leaves millions of dollars on the table,” he says.
Also detailed in the report is how the Louisiana Department of Revenue overpaid the Algiers Economic Development District No. 1 more than $6.9 million in sales tax distributions since the beginning of a cooperative endeavor agreement executed in 2004. The report also says Louisiana potentially lost more than $1.1 billion in severance tax revenue between fiscal years 2010 and 2014 because of the suspension of the tax for horizontally drilled wells.
—Alexandria Burris
