The Louisiana Department of Health (LDH) has been facing continuous financial and compliance issues, as highlighted in a new report by the Louisiana Legislative Auditor. The report reveals that despite some progress, LDH has failed to address the majority of prior audit findings, with some issues remaining unresolved for up to seven years. The audit reviewed the status of concerns flagged in a March 2024 management letter, finding that LDH had only resolved inadequate controls and noncompliance with National Correct Coding Initiative requirements.
Ongoing Financial Misreporting and Medicaid Issues
Financial Misreporting
One of the most critical unresolved issues highlighted in the audit is the LDH’s ongoing financial misreporting. The department has been unable to provide necessary documentation showing that $248 million in Medicaid expenditures reported to the federal government had a matching state share, resulting in $168 million in federal questioned costs. Additionally, the failure to properly update federal cost-share percentages in state accounting systems led to another $87.6 million in questioned costs. These financial discrepancies have been attributed to staffing shortages and inadequate training. In response, LDH management has hired a vendor to aid in federal reporting and launched a staff development plan.
Medicaid Eligibility Verification
The audit also uncovered significant issues related to Medicaid eligibility verification. For the seventh year in a row, the LDH has failed to fully enroll and screen all Medicaid managed care and dental providers, leading to unreliable provider information. This persistent problem not only impacts the accuracy of Medicaid reports but also raises concerns over the potential for fraud and abuse. The lack of effective verification procedures means that ineligible recipients could potentially receive benefits, which could lead to substantial financial losses for the state. Addressing this issue will require more robust oversight and systematic checks to ensure compliance with eligibility requirements.
Lax Provider Oversight and Ineffective Controls
Provider Oversight Failures
Lax provider oversight remains a critical area of concern for the LDH. For the fourth consecutive year, the LDH has lacked adequate financial controls, leading to the submission of inaccurate federal schedules. Additionally, payroll certification failures persisted for the third year, with non-compliance in timesheet approvals and leave requests procedures. These lapses in oversight and control have significant implications for the department’s overall financial management and accountability. Ensuring that proper controls are in place and enforced will be essential in mitigating risks and enhancing transparency within the department.
Hospital Payments and Billing Issues
Another notable issue in the audit pertains to Disproportionate Share Hospital payments, which exceeded the federally-allocated limit by $4.2 million due to insufficient reconciliation. These overpayments highlight the need for improved financial tracking and accountability measures within the LDH to prevent future discrepancies. Furthermore, billing issues in behavioral health services have persisted for six years. The ongoing problems in detecting improper claims reflect a systemic failure that affects the integrity of the entire payment process. Both LDH and its contractors must implement more effective strategies and technologies to monitor and verify billing claims comprehensively.
Addressing Persistent Compliance Issues
Maternity Kick Payments and Eligibility Determinations
Finally, the LDH’s compliance issues are not limited to financial discrepancies alone. Maternity kick payments remain noncompliant for the second straight year, increasing the risk of overpayments. Additionally, eligibility determinations for Medicaid and the Children’s Health Insurance Program have been plagued by internal control issues for the fifth year. These ongoing problems necessitate an urgent overhaul of the LDH’s internal control mechanisms to ensure that only eligible individuals receive benefits.
Home and Community-Based Service Payments
Home and community-based service payments under Medicaid waiver programs have also been a point of concern, with payments being made without adequate documentation for the second consecutive year. This lack of proper documentation and verification processes further increases the risk of improper payments and financial mismanagement. Implementing strict verification protocols and conducting regular audits can help address these issues and improve the overall fiscal oversight of these programs.
Toward Greater Oversight and Systemic Improvements
The Louisiana Department of Health (LDH) has been grappling with ongoing financial and compliance challenges, as outlined in a recent report from the Louisiana Legislative Auditor. According to this audit, despite some attempts at improvement, the LDH has largely failed to address the bulk of earlier audit findings, some of which have been unresolved for up to seven years.
This review scrutinized the status of issues identified in a March 2024 management letter, determining that the LDH had managed to resolve problems related to inadequate controls and noncompliance with the National Correct Coding Initiative requirements. However, the majority of the previous concerns listed in the report have remained unaddressed over the years, showcasing a significant lag in correcting these persistent issues. The failure to resolve these audit findings not only points to a lack of efficiency but also raises questions about the department’s ability to enforce compliance and maintain financial integrity.
