Will audit of Medicaid recipients pay off? – Jackson Clarion Ledger
The Clarion-Ledger spoke with Mississippi Congressman about how they’ll vote Thursday.
Legislation signed by Gov. Phil Bryant aiming to reduce welfare fraud contains what’s become a familiar hallmark in Mississippi’s statehouse to reduce what lawmakers say is the abuse of safety net programs — to save public money and spend taxpayer dollars in the private sector.
In the past, that policy shortlist has included coordinating with a third-party vendor to drug test welfare applicants and an ill-fated $13.1 million contract with Xerox to fingerprint children attending daycares receiving federal vouchers.
The latest go-round is the Medicaid and Human Services Transparency and Fraud Prevention Act, which authorizes the state Division of Medicaid and the Department of Human Services to hire a private contractor to conduct enhanced eligibility screenings for enrollees in the state’s social programs. It becomes law July 1.
A review of contracts awarded by the state Department of Medicaid since 2010 shows that Mississippi has already spent at least $2.7 million on two contracts geared toward eligibility and asset verification. In 2011, a $1.6 million contract was awarded to vendor Health Management Systems Inc. to identify assets held by Medicaid applicants and beneficiaries.
In 2014, the state awarded a $1.1 million contract to SLI Global Solutions as part of its Eligibility Modernization Project. The term on that contract ended in February 2016.
Still, some lawmakers believe there’s more work to be done.
Senate Medicaid Chair Brice Wiggins, R-Pascagoula, called the pending law “another pair of eyes.”
“It’s always good to have that check — to have an independent third-party to make sure things are done correctly,” he said.
Flashy headlines of crackdowns from states such as Illinois, where an audit found 14,000 dead people on the Medicaid rolls, have made some proponents of the measure confident that the policy will bring a return on investment. A fiscal analysis by the Stephen Group forecast $7 million to $14 million in savings for the state’s general fund.
On the low end of a roughly $1 billion budget, however, $7 million equates to less than 1 percent.
The same report estimated that the program would cost between $4 million to $10 million annually to run. It also warned such a program could become costly, depending on how it’s conducted. Vendors surveyed by the Stephen Group said they would likely charge 50 cents per enrollee for an identity verification search. Depending on the scope of whom is checked and how often that figure could quickly run up.
“TSG advises that searching for too much information many times during the year will add significant cost with diminishing marginal return,” the report reads. Medicaid checks eligibility data on an annual basis, and the Stephen Group recommended that any vendor runs checks no more than twice a year.
Much of opponents’ consternation with the act is that at best it’s a misguided and potentially expensive attempt to address a limited issue — during floor debate supporters were unable to nail down specific beneficiary fraud statistics — and at worst contains an underlying current that society’s most vulnerable are not to be considered trustworthy.
“What is driving some of us up the wall is the notion that somehow the entire class of people receiving Medicaid or other benefits are a bunch of clever, crafty people out trying to steal money from hard-working folks and if we could only crack down on this we could balance the state budget,” said Sen. Medicaid Vice-Chairman Hob Bryant, D-Amory, on the last day of the legislative session.
Viewed in the context of the presiding party’s opposition to Medicaid expansion, it’s not a surprise that support for the bill quickly fell along partisan lines.
“There’s only one reason for this bill and that’s to churn people off the rolls,” said Rep. Jarvis Dortch, D-Raymond. He views the bill as a red meat issue for a constituency. “I think the Legislature is really criminalizing people for being poor.”
Save for two sections addressing providers, the language of the act is almost exclusively focused on beneficiaries, drawing red flags for several lawmakers.
Executive Director of state Medicaid David Dzielak told The Clarion-Ledger that the majority of the fraud occurs on the provider side.
In the 2016 fiscal year, the Office of Program Integrity recouped more than $4.5 million in funds from providers.
Originally the act only mandated the public release of some provider data such as the number of services, average submitted charges and a count of unique beneficiaries treated.
After push back, an amendment by Rep. Omeria Scott, D-Laurel, expanding the scope of the legislation to address provider fraud was approved. In negotiations, that language was stripped, but lawmakers kept a requirement mandating that a private contractor is hired to address provider fraud.
For Dortch, however, concern still remains.
He pointed out that children comprise 56 percent of the state’s Medicaid enrollment and expressed fear about them being kicked off the roles due to a potential clerical error. The Stephen Group said that “children generally lack sufficient information footprint to justify the cost of a search,” but it’s not known how this recommendation will be followed.
Dortch cited findings from the Illinois Department of Health Care and Family Services that has initiated a similar undertaking.
The state hired a private vendor called Maximus to do electronic determinations of beneficiaries.
In the second quarter of the current fiscal year, the state’s Medicaid Redetermination Project reviewed 65,000 cases. Forty-one percent of clients who responded were found eligible for the same medical coverage, the report states. Another 10 percent responded and were found eligible for a different medical program or for a different number of people in the household. About 48 percent of clients were canceled, mostly for failing to respond to the redetermination request. Of the total clients initially canceled, approximately 15 percent cooperated within three months and were reinstated.
Under the act, if a beneficiary is flagged, a letter is sent to their home address. They’re then responsible for responding to the agency within 10 days at risk of removal.
Jennifer Wagner, with the progressive-minded Center on Budget and Policy Priorities, said that Mississippi’s legislation contains some safeguards by requiring the Department of Medicaid make the final decision on eligibility determination. But she also acknowledged the “dynamic nature” of low-income families who might fall through the gaps if they don’t receive the letter.
“My biggest concern with legislation like this is the discussion of cost-savings. That can provide some very dangerous incentives,” Wagner said. “What sometimes happens is that people are required to report every time they get a raise (even if they still meet the threshold for assistance). All those additional hurdles make it harder for eligible families to maintain their enrollment. It’s not because they’re ineligible or fraudulent.”