BATON ROUGE (The Center Square) — A recent audit of the Louisiana Department of Health uncovered a dozen financial and management issues, many involving problems that have plagued the agency for years.
Louisiana Legislative Auditor Mike Waguespack issued a financial audit report for the Louisiana Department of Health last week that assesses accountability over public funds between July 1, 2021 and June 30, 2022.
The analysis showed that while LDH resolved nine of 18 prior year findings, nine of those issues and three others pose risks regarding federal compliance and managing public funds.
LDH officials failed to enroll and screen Healthy Louisiana managed care providers and dental managed care providers as required by federal regulations for the fifth consecutive year, which means the state cannot ensure compliance.
Also for the fifth consecutive year, auditors found LDH did not perform five-year revalidations; screenings based on categorical risk of fraud, waste, or abuse; or monthly checks of the federal excluded party database, which is required for Medicaid and Children’s Health Insurance Program fee-for-service providers.
“Based on information provided by LDH, approximately 71% of providers with claims activity in fiscal year 2022 have not had a risk-based screening with a majority of those providers enrolled more than five years ago,” auditors wrote.
Other repeat findings involve a lack of adequate controls over financial reporting for a second consecutive year, and a lack of adequate internal controls over eligibility determinations for Medicaid and CHIP programs, a finding that’s now three years running.
Auditors also found “LDH’s control over compliance with federal regulations regarding the refunding of provider overpayments to the Centers for Medicare & Medicaid Services was not operating effectively for all quarters for the fiscal year ending June 30, 2022.
“In addition, in a sample of 60 provider overpayments we were unable to obtain sufficient appropriate audit evidence to determine if the federal portion of provider overpayment collections were returned to CMS in the appropriate quarter, as LDH did not provide proper supporting documentation,” the report read.
LDH also failed to review controls for its Magellan Medicaid Administration system used for drug rebates.
Other issues centered on internal control over payroll expenses for several federal programs, including some two and three years in a row. The issues involved time sheets that were approved late, or not at all, and others that were approved before they were certified by the employee. Auditors identified similar issues with failure to approve leave requests in a timely manner.
Auditors also found LDH failed to comply with National Correct Coding Initiative Requirements for the second consecutive year, with a test revealing 765,564 in questioned costs in federal funds.
LDH officials also lacked controls over its drug rebate collections, and billing for behavioral health services, with the latter resulting in $8.8 million in billing errors.
“For fiscal year 2022, we identified approximately $8.8 million in encounters for services … that were paid … even though the encounters do not appear to comply with LDH’s encounter coding requirements and/or approved fee schedules,” auditors wrote.
The final finding showed LDH “did not have adequate controls to ensure compliance with federal regulations prohibiting the use of federal funding for abortion claims” for the fourth consecutive year.
LDH officials responded to the findings in a series of letters to Waguespack between December 2022 and March 2023 that concurred with many of the findings, but disputed others. The letters laid out corrective action plans for many of the issues, but LDH officials noted some of the findings were related to policies suspended by the federal government during the pandemic.
“Program decisions that affected normal policy and procedures were made based on guidance at that particular time while also being cautious to not jeopardize enhanced federal matching funds under the (Families First Coronavirus Response Act) by inappropriately terminating an individual’s coverage during the (public health emergency),” LDH Secretary Courtney Phillips wrote.
