Audit finds massive income fraud for Medicaid Benefits go to six-figure households
Louisiana’s legislative auditor wanted to know how the state’s expansion of Medicaid under Obamacare was doing, so he picked 100 people who were deemed eligible under the rules.
He found that 82 of them made so much money that they shouldn’t have qualified for the benefits they received.
Auditor Daryl G. Purpera, who issued his findings last month to little fanfare outside of Louisiana, figured if those statistics hold true for the rest of the expanded Medicaid population in his state, then the losses to ineligible beneficiaries could be as high as $85 million.
“This is huge. It really is,” he told The Washington Times. “As more and more state auditors realize what this is doing to them, it’s going to come to a point where all 50 of them are going to have to declare they can no longer say the state’s books are accurate. I really do believe that day is coming.”
Louisiana may be an outlier. A federal inspector general’s report this year found 38 out of a sample of 150 Medicaid beneficiaries in California were potentially ineligible. Taken statewide, that would mean more than 350,000 questionable customers.
Another report estimated nearly 50,000 questionable beneficiaries in New York.
The federal inspector general was looking broadly at eligibility, including residency problems and other disqualifications.
In Louisiana, Mr. Purpera obtained income data from the state’s workforce commission and compared it with what Medicaid customers told the health department they were making to qualify for the benefit.
He concluded that some should never have been approved at all and most were lowballing their income at some point and should have been kicked out of the program for at least part of the time they were claiming benefits.
Two of the 100 people he examined were using Medicaid despite annual incomes exceeding $300,000.
Four other recipients had six-figure incomes. One of them, with an income of $111,785 per year, received $17,807 in Medicaid payments. Another, with an annual income of $126,284, spent 12 months on Medicaid and received nearly $11,000 in payments, according to the report.
“The report is stunning. It is breathtaking. There are not words in English to describe what our legislative auditor found,” said Sen. John Kennedy, Louisiana Republican. “The Department of Health just threw the money in the dirt.”
Mr. Kennedy has proposed legislation to require every state Medicaid, welfare and food stamp program to use federal income data to verify eligibility.
“It’s the most accurate income data we have out there. It would be a requirement. Right now, it’s optional,” the senator said.
The Medicaid expansion was a key part of Obamacare. It made the federal-state health care program available to people whose incomes put them slightly above the poverty line — enough to not qualify under the old program but too little to qualify for subsidies to buy plans on Obamacare’s market exchanges.
Most states have accepted the expansion, which for the first three years was covered 100 percent by the federal government. That percentage began to recede in 2017, and the current arrangement requires states to pay 10 percent of the costs by 2020.
Louisiana offers a good example of the result, Mr. Kennedy said. In 2008, the Pelican State spent $6 billion on Medicaid, or 18.6 percent of the state budget. Now, Louisiana is spending $12.4 billion on Medicaid, representing 36 percent of the budget. More than a quarter of the state’s population is on Medicaid.
Nationwide, Medicaid accounts for roughly $1 of every $3 that states spend, according to health care policy analysts, and those figures aren’t slowing. The federal estimate for the growth in Medicaid spending is 6.1 percent annually for states and 5.7 percent for Washington, according to the Centers for Medicare and Medicaid Services.
Any tool that can help officials close loopholes should be used, analysts said. Medicaid spending has topped a halftrillion dollars annually, and using the federal government’s own admission that up to 10 percent of all Medicaid spending is improper, that would fix the amount in question at $50 billion.
“Every dollar that’s stolen from the Medicaid system by a fraudster is a dollar that cannot go to help the truly needy,” said Nicholas Horton, director of research at the Foundation for Government Accountability. “So states should absolutely be focusing on closing gaps, and there is certainly more states can and should do to protect their welfare programs and ensure that resources are preserved for folks who are truly needy.”
Mr. Kennedy acknowledged that Congress won’t be able to address his bill this year.
“I’ve had cursory discussions about it with the leadership on both sides, but I haven’t really started whipping it yet, so it’ll be after the first of the year,” he said. “I’ll obviously have to persuade some of my Democratic colleagues, but the truth is it should be bipartisan. And if you support Medicaid, you should be for it, because we’re talking about scarce resources and all the money that gets spent on ineligible beneficiaries means all the folks who do need help won’t get it.”