NEW ORLEANS - The Louisiana Department of Health (LDH) has unveiled a series of initiatives targeting Medicaid fraud including the creation of a new Taskforce and a policy move away from the single Pharmacy Benefit Manager model.
Medicaid Fraud Reduction
LDH Undersecretary Drew Maranto has announced the formation of the "Fighting Fraud, Waste, and Abuse Taskforce," a collaborate with the Louisiana Department of Justice (LA DOGE), the Attorney General’s Office, the Legislative Auditor, and members of the legislature to enhance oversight and close gaps.
“No action of fraud, waste, or abuse is acceptable,” said Maranto. “We will strengthen our Medicaid eligibility efforts to ensure that those qualifying for Medicaid services are included on the rolls of a new data sharing partnership with the Office of Motor Vehicles.”
The new program starts April 23 and is designed to prevent Medicaid members who hold an active driver’s license in another state from receiving benefits.
“Through a critical partnership between LDH, LA DOGE and the University of Louisiana at Lafayette, we plan to utilize a new AI data analytics tool to identify and address fraudulent practices, waste, and abuse within the system,” said Maranto.
Dr Ramesh Kolluru, Vice President for Research , Innovation, and Economic Development at the University of Louisiana at Lafayette (ULL) said that in 2024 alone, the Centers for Medicare & Medicaid Services (CMMS), a federal agency in the U.S. Department of Health and Human Services, flagged around $31 billion dollars in “questionable payments.”
“The Department of Justice charged nearly $3 billion in fraudulent claims at the national level,” said Kolluru. “We will identify similar patterns that may exist here in Louisiana using AI machine learning, validate those findings with subject matter experts, and support any remedial efforts of Louisiana. We’ll partner with LDH and the Department of Technology Services to modernize Louisiana’s Medicaid system.”
LDH Undersecretary Maranto said that expanded oversight and audit by the LDH Program Integrity (PI) Unit along with enhanced collaboration with the Attorney General’s Medicaid Fraud Control Unit would better address gaps in the system.
“The Department will be implementing another new data analytics and case management system within our PI unit,” said Maranto. “Utilizing Louisiana-specific algorithms, we can target high-risk provider areas.”
Maranto also said that there would be more frequent case coordination meetings to prevent unintentional duplication of effort. “For the first time in the history of PI and Medicaid Fraud Control Unit’s history, we will provide full access to the Medicaid data warehouse allowing them to leverage their own expertise in discovering fraudulent practices,” said Maranto.
Pharmacy Benefit Management
Maranto also announced that the LDH will have a new focus on pharmacy benefit management in Louisiana Medicaid, stating that a policy change would move Louisiana away from the single Pharmacy Benefit Manager (PBM).
“This structure simply hasn’t achieved what was intended and it’s time to align the system with patients and the State,” said Maranto.
In Louisiana, a Pharmacy Benefit Manager (PBM) is a third-party administrator that manages prescription drug benefits on behalf of health plans, including Medicaid. Since 2023, Magellan Medicaid Administration (MMA) has served as the sole PBM for all six Medicaid Medicaid Managed Care Organizations (MCOs).
“Child and Adult Pharmacy is a critical component of Louisiana Medicaid and we must preserve these benefits,” said Maranto. “Returning ownership to the Managed Care Plans is a first step. Our MCOs are charged with managing the overall health of the beneficiaries they serve.”
