Here's Legislative Audit's Report on Arkansas' Medicaid Program

You can download the PDF of the complete state Division of Legislative Audit report on Arkansas' Medicaid program, administered by the state Department of Human Services, right here.

The report, released Friday afternoon, comes as Republican legislators, facing the possibility of expanding the state's Medicaid program under the Affordable Care Act, have said they want to root out fraud within the Medicaid program, which provides health care coverage for the poor.

The report looks at several areas of the Medicaid program from fiscal years 2009-2012, including recipient eligibility, provider eligibility, data privacy and program integrity.

For its report on Medicaid eligibility, the audit took a sample of recipient files and found expenditures for recipients whose income exceeded program limits or who failed to provide required documentation of their eligibility. From that information, the audit generated an error rate for ineligibile recipients for each fiscal year.

The error rates for each year were:

  • Fiscal year 2009 - 15.48 percent (based on 155 cases with 24 ineligibile recipients)
  • Fiscal year 2010 - 6.67 percent (based on 645 cases with 43 ineligibile recipients)
  • Fiscal year 2011 - 3.27 percent (based on 153 cases with 5 ineligibile recipients)
  • Fiscal year 2012 - 14.09 percent (based on 149 cases with 21 ineligibile recipients)

In all, the audit says the errors resulted in $1.36 million in payments to eligibile recipients in those fiscal years. 

In its response to the findings for 2012, DHS noted that auditors changed their sample from previous years to focus on the Medicaid Spend-Down categories, of which there are about 1,000 active cases at a time.

"All of the error cases identified in the [state fiscal year] 2012 audit were from this small group of Medicaid eligibles," the DHS response said. "[Division of County Operations, which oversee eligibility,] disagrees with four of the cited errors, but appreciates learning that DCO staff was misapplying a section of the Spend-Down policy. DHS will clarify the policy and retrain staff. The audit did not identify any errors in the remaining sample case from other Medicaid coverage categories." 

The audit also had criticisms of the programs Program Integrity, or PI, Unit, which oversees Medicaid program reimbursements. The audit said the director of the PI Unit doesn't report to the DHS or Division of Medicald Services director, and the unit did not issue six reports detailing improper payments of nearly $80,000.

In its response, DHS noted that the PI Unit is under the Division of Medicald Services, and that its office is two doors down from the DMS director office.

"The PI Unit manager is free to contact the director to discuss investigations, reports, or policy concerns, and has done so a number of times over the past year," DHS said. "These conversations include informal, unscheduled one-on-one discussions as well as more formal and larger meetings."

DHS also said the PI Unit "completed and issued 410 reports in [state fiscal years] 2010, 2011, and 2012. The amount collected to date from these reports totals over $3.8 million, nearly the same as the final questioned costs." 

The Debate 

House Speaker Davy Carter, R-Cabot, has said results of the audit could affect discussions over whether to expand program.

"There's a perception out there that there is some waste, abuse and fraud in the system, and whether or not that's accurate, or to the extent that's accurate, maybe this report will help in that analysis," Carter said last month. "If it's something that's eye-catching and materially bad -- and that's proven over the coming days and weeks to be the case after we vet the report -- then that makes it awfully hard to dive into something else before you go in and address problems."

The Arkansas Human Services Department last month told The Associated Press that agency officials believe the samples used by the Division of Legislative Audit to compile the report don't give a fair portrayal of management of the program.

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