Legislators probe potential Medicaid provider fraud

By David Jacobs | The Center Square

Recent state audits of possibly fraudulent Medicaid billing for behavioral health services raise questions about oversight of those providers, Louisiana legislators said.

Two recent Louisiana Legislative Auditor reports taken together challenge a little more than $1 million in billings for the multibillion-dollar Medicaid program. But lawmakers questioned whether those reports hint at larger problems with provider fraud.

A state law enacted last year limits individual behavioral health providers to performing no more than 12 hours of services per day in most circumstances. According to the Attorney General’s Medicaid Fraud Control Unit, this law helps them better investigate and prosecute fraud cases, the LLA’s report says.

According to the LLA, between Aug. 1, 2019, and March 9, 2020, 315 individual providers billed for more than 12 hours of combined psychosocial rehabilitation and/or community psychiatric support treatment services in a single calendar day. This improper billing for services in excess of 12 hours totaled at least $293,080, the auditor’s office says.

The Louisiana Department of Health is responsible for ensuring providers do not bill for more than 12 hours per day, but LDH relies on the managed care organizations that oversee the Medicaid program to make sure the billed amounts are proper.

“Why are we paying the MCOs to do this if they’re not doing it?” asked state Sen. Jay Luneau, an Alexandria Democrat.

At an oversight meeting, legislators also reviewed a separate audit that found a single firm was paid more than $200,000 for services that don’t appear to have been delivered. The auditor also found almost $657,000 for services provided under questionable or at least improperly billed circumstances; for example, services provided when the supposed recipient was not present.

Sen. Fred Mills, R-Parks, said he was less concerned about the specific provider and more about “systemic problems” that can be corrected.

“Where does the buck stop here?” Sen. Louie Bernard, R-Natchitoches, asked. “There’s a fog around the accountability of this.”

LDH officials said the MCOs have referred some 720 providers for further investigation, so it does happen, but payments to providers cannot be suspended without due process. Asked if taxpayers or the MCOs eat the costs that can’t be recovered, they said fraud-related losses are included in larger expense calculations that can cost the managed care companies money.

State health officials say there could be technical solutions to some of the issues raised by the audits, but it would be a question of whether the benefits are worth the costs for technology and staff.

Legislators also discussed a recent Legislative Auditor report looking at potential discrepancies in the COVID-19 case counts for Red River and Desoto parishes. Local officials publicly claimed state officials were inflating the number of cases in their parishes, but the auditor’s office found the state’s counts largely were correct.

Under an exception to health privacy rules mandated by the federal law known as HIPAA, during the early days of the pandemic state officials shared lists of COVID-19-positive residents with local officials to be used by first responders who otherwise might not know if they came into contact with someone who had the new coronavirus. At the time, personal protective equipment was in short supply so “situational awareness” was considered critical, officials said.

Steve Russo, the state health department’s executive counsel, said local officials using the lists for anything other than the stated purpose may have comitted a HIPAA violation. Officials from the two parishes did not speak up when asked to do so at the legislative meeting, though chairman Rep. Barry Ivey, R-Baton Rouge, said they were invited to attend.