BATON ROUGE — As Louisiana legislators look to shore up a budget that has faced a steady cycle of deficits in recent years, calls for looking into how costly health care has become have steadily grown louder.
The Louisiana Department of Health is the second only to the Department of Education in how much money the state spends each year. Most of the money goes to support the Medicaid program, which provides health care to nearly half of the children in the state and covers about 65 percent of the births in the state. After expanding the state’s Medicaid enrollment criteria under the federal Affordable Care Act, some 1.6 million people now rely on the program for their health care needs.
With a nearly $14 billion budget — $10 billion of that in federal funding — the Louisiana Department of Health is expected to account for about half of the estimated $28 billion state budget for the fiscal year that starts July 1.
The size of the Health Department’s budget and the limits on how other areas can be pared has several lawmakers looking for places to trim health care. One of the most common suggestions: Cut back on Medicaid fraud — though it’s not clear how much fraud is costing the state.
Rep. Rick Edmonds, R-Baton Rouge, said Gov. John Bel Edwards directed legislators to “turn over every stone” in their quest to solving the state’s repeated financial problems and he agrees with the idea. So he has set his sights in particular on ways that money may be misspent. He thinks that Medicaid fraud should be among the issues weighed.
Edmonds has sponsored measures this session to directly address Medicaid fraud. He said he has been trying to get more information about how pervasive the problem is, but feels that he’s gotten little insight.
“We’re working hard on every front to answer these questions and aggressively take care of our budget needs,” Edmonds said. “This is just another one of those areas where we hope we can find a way to cut back.”
The state Department of Health denies that fraud in the Medicaid program is the pot of gold that some elected leaders are looking for as they try to shore up the state’s finances.
Nationally, pundits claim that Medicaid fraud may account for as much as 10 percent of the program’s costs, but an actual figure isn’t easy to come by.
“We have a fairly complex system to curtail fraud, waste and abuse. We have really good partners in this enterprise,” Andrew Tuozzolo, chief of staff for Health Secretary Rebekah Gee, said. “It’s a very small amount that we find and recover.”
Edmonds, a member of the powerful House Appropriations Committee since taking office in 2016, has taken deep dives into several areas of the budget. Notably, earlier this year he and other freshman lawmaker were behind a push to save money through the elimination of vacant jobs that are funded in state government, though department heads and the Edwards administration countered that the figures were misguided, at best, when considering that many of the jobs would be needed and filled.
He’s not the first to turn an eye toward Medicaid fraud. Now-U.S. Sen. John N. Kennedy, who previously served as state treasurer for 16 years, often pointed to investigating fraud and waste within the program as a way to save money.
Each year, Louisiana is recognized as one of the top states in investigating, prosecuting and ultimately recovering Medicaid money that has been misspent.
Medicaid fraud is used as a catch-all term to refer to ways that providers — medical professionals and others who bill for Medicaid services — will charge more to the program than they should. Most commonly, it includes billing for services that were never provided, over-inflating costs and bribing third parties for kickbacks.
The Medicaid Fraud Control Unit, a division of the state Department of Justice under the Attorney General, handles most of the investigations in Louisiana.
A TOP PERFORMER
Louisiana has repeatedly been lauded at one of the top states for investigating and recovering money that has been fraudulently spent on the program.
For the 2016 federal budget cycle, the most recent figures that are available, the state recovered more than $40.3 million in fraudulent Medicaid charges. Eighty-six people were indicted, and 75 people were convicted. By comparison, Mississippi recovered $19.8 million and had 54 indictments and 64 convictions. Texas recovered $128.2 million and had 109 indictments and 60 convictions. Arkansas recovered $9.2 million and had 22 indictments and 27 convictions.
“We do see a lot of it,” said Ellison Travis, who leads the state’s Medicaid Fraud Control Unit.
Most often, the state has seen fraud in areas that are harder to police — for example, home health care programs offered through waiver programs — because there is less direct oversight, he said. “There’s a lot of room for mischief,” Travis said.
He said it’s unclear just how big the problem is. Travis also suggested that money is the key issue among what the unit needs to perform its job best.
Edmonds has sponsored a bill this session that is awaiting review from the Senate Finance Committee that would direct certain payments to the fraud unit to keep.
“Sometimes that has been raided,” Travis said.
‘WE’LL CONFRONT PROVIDERS’
There is also concern that the state can only recover money that has been misspent by providers. If an individual has received Medicaid coverage that she or he should not qualify for, there is no way to recover the funding. Changing that would take federal action, Travis noted.
The Louisiana Department of Health also investigates fraud but has a smaller operation because it has no proprietorial power. Tuozzolo said that the department focuses heavily on weeding out people who shouldn’t be enrolled in the program and referring providers who appear problematic to the AG’s office for investigation.
“We want to do the best job we can on the front end to avoid even talking about fraud,” he said.
On the prevention end, the state uses a sophisticated system that will point out questionable charges, like when a doctor has reported performing a surgery on someone in New Orleans and someone else in Shreveport on the same day.
“We’ll confront providers about it,” Tuozzolo said.
‘THEY ARE INCENTIVIZED’
He said the Health Department typically refers 200-400 questionable cases to the DOJ’s Medicaid Fraud Control Unit each year.
But Tuozzolo said that Louisiana’s shift to managed care providers, which cover most of the state’s Medicaid recipients, has also helped with the self policing.
“They are incentivized to not have fraud,” he said. “They don’t want fraudulent charges; they don’t want unnecessary charges.”
Last year, some 170 providers were kicked off the state’s Medicaid option list because of questionable billing. Tuozzolo said that number is a typical annual figure.
“We’re constantly doing that,” he said.