NCPA - National Center for Policy Analysis


July 8, 2010

A joint effort of Louisiana Department of Health and Hospitals (DHH) Secretary Alan Levine and Attorney General Buddy Caldwell to combat Medicaid fraud is yielding positive results for Louisiana taxpayers. 

According to DHH: 

  • The use of a joint Medicaid Fraud Control Unit (MFCU) has allowed state officials to significantly expedite identification of improper payments from a total value of $1.9 million in 2005 and $1.4 million in 2007 to more than $6.2 million in the 2009 fiscal year.
  • DHH's recovery rate via collections likewise increased from $1.6 million in fiscal year 2005 to $5.85 million in fiscal year 2009, with the total number of recoupments increasing from 234 incidents in 2005 to 516 in fiscal year 2009. 

According to Levine, who refers to Medicaid as a "pay-and-chase system," the way Congress designed Medicaid sets the system up for fraud. 

"Make no mistake, Medicaid fraud is theft -- theft from Louisiana taxpayers and from those who rely on the Medicaid program for their most basic health care needs.  Louisiana is pleased to be on the cutting edge of fighting Medicaid fraud and finding more effective and efficient ways to deliver health care to the neediest among us," says Levine. 

Under the Medicaid system: 

  • Bills are received by providers and then processed and paid.
  • It is only after the payment process is completed that controls kick in, leaving states such as Louisiana in the position of having to chase after recipients of erroneous and fraudulent payments. 

President Obama's administration earlier this year reported more than $55 billion in improper payments were made via Medicaid and Medicare in 2009 alone. 

"We're working on a project that will transform Medicaid in Louisiana from a fragmented, fraud-laden, fee-for-service system toward a model that more closely resembles the private market, where enrollees choose a provider network that then becomes accountable for their care -- and for the payment of their care," says one DHH staffer. 

Source: Tabassum Rahmani, "Louisiana Cracks Down on Medicaid Fraud," Heartland Institute, July 2010.


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