Oversight of Missouri Medicaid Contractors Inadequate, Audit Finds | St. Louis Public Radio

Oversight of Missouri Medicaid Contractors Inadequate, Audit Finds

Dec 29, 2014

The state agency that provides Medicaid coverage to more than 840,000 Missourians does not have proper oversight over contractors in charge of certain aspects of payment processing, according to an audit released Monday of MO HealthNet.  

Credit Adrian Clark | Flickr

The report by the office of Tom Schweich, the Missouri state auditor, identified four areas of concern:

  1. A high number of errors—one as high as $58.3 million—was made by the contractor in charge of third-party liability transactions and not caught by MO HealthNet staff. An example of third party liability is when a Medicaid enrollee is in a car accident, and his or her car insurance pays for some of the medical bills.
  2. People who had recently turned 65 and are newly eligible for Medicare were not quickly identified, meaning their care should have been paid for by federal dollars, not MO HealthNet.
  3. Checks were not deposited in a timely manner. Some checks were held so long, they became non-negotiable.
  4. There was no requirement for health-care providers to identify and reconcile overpayments from MO HealthNet, leading to perhaps hundreds of thousands of dollars in uncollected funds.    

The state did not identify the contractors within the audit, but Texas-based Health Management Systems, Inc. receives about $5 million annually to provide third-party liability-fund recovery, the service listed in the first area of focus.  

According to the audit, the contractor’s case management system had the capability to monitor these payments, but the system had not been used.

“[MO HealthNet] instead relies on monthly meetings with the contractor to identify and resolve any issues,” auditors wrote.

Tim McBride, a professor at Washington University, is chairman of the oversight committee that provides policy recommendations to MO HealthNet. McBride said the audit’s findings demonstrate the problems the agency continues to experience as it relies more and more on contract work.

“They’ll turn around and pay contractors to do the same work that state employees could be doing,” McBride said. “It seems like it’s a good idea because you have fewer state employees, but what this report is pointing out is that it actually leads to probably more expenditures for the state and delays.”

MO HealthNet enrollees include children, pregnant women and people with disabilities who fall below certain income requirements. In all, the program costs about $7 billion each year.

Even though it’s unclear how much money the state may have lost as a result of these practices, Harry Otto, deputy state auditor, said he doesn’t believe there’s evidence to suggest wrongdoing.

“We did not find wanton disregard for the rules. We found errors and omissions and places where things could be done better,” Otto said.

Responses from the Department of Social Services were included in the audit, saying changes to the processes identified were being made. The department did not return media requests for comment.