(The Center Square) — According to a new audit, the Louisiana Department of Health paid out approximately $112.6 million in recent years for Medicaid beneficiaries who may not have lived in Louisiana.
An audit report issued by the Louisiana Legislative Auditor last week analyzed the process used by LDH to identify and remove Medicaid beneficiaries who no longer reside in Louisiana and no longer qualify for the state’s Medicaid program.
“We found that LDH made approximately $112.6 million in per-member per-month payments to managed care entities for 13,771 adult beneficiaries who do not appear to have lived in Louisiana during the coverage period paid for,” LLA Mike Waguespack wrote in a letter to lawmakers summarizing the findings.
The report details about $3 million of the total was paid for 380 beneficiaries from June 2019 through February 2023 who were identified as living out of state. The managed care entities paid $92,087 to out-of-state service providers despite LDH’s eligibility system identifying the individuals as residents of other states.
“We also found that LDH paid approximately $109.5 million of the $112.6 million for 13,391 beneficiaries from September 2016 through February 2023 who, according to Louisiana Office of Motor Vehicles data, had obtained a driver’s license in another state,” Waguespack wrote. “The (managed care entities) paid approximately $2.8 million to out-of-state service providers after these beneficiaries obtained an out-of-state driver’s license.”
Other findings suggested further Louisiana Medicaid funding flowing to 3,633 beneficiaries who only received services from out-of-state providers may also be going to residents of other states, though they did not have an out-of-state address or license from another state.
While eligibility requirements mandate Medicaid recipients reside in Louisiana, auditors noted LDH’s Eligibility Manual allows beneficiaries to “self-attest to some information when applying for or renewing Medicaid coverage, including their residency status.” That policy aligns with verification plans in 40 states.
While federal regulations prohibited states from removing Medicaid beneficiaries during the public health crisis, “moved out of state” was one of three reasons that remained an allowable cause for removal.
“Although the (Families First Coronavirus Response Act) allowed for the termination of coverage of beneficiaries who no longer resided in-state, the Centers for Medicare and Medicaid Services stated during weekly (public health emergency) conference calls with state health departments that LDH could not terminate a beneficiary’s coverage unless it received confirmation from the beneficiary that they no longer lived in Louisiana,” auditors wrote.
The audit detailed several examples of former residents who continued to receive services out of state after obtaining a driver’s license elsewhere, including some before the pandemic.
Auditors recommended LDH strengthen its eligibility process by utilizing data from Medicaid and other federal data, as well as information from the state Office of Motor Vehicles.
LDH Secretary Stephen Russo responded to the audit’s findings with a letter to Waguespack on Aug. 10 that blamed much of the issue on federal restrictions during the pandemic.
“This prevented the previous practice of using external sources such as returned mail from the post office to initiate termination,” Russo wrote. “LDH was very careful in allowing closures during the (public health emergency) as to not jeopardize the increase federal match rate” funding.
Russo promised to review the beneficiaries identified in the audit and strengthen processes for vetting residency, including incorporating Office of Motor Vehicle data.
