Widespread Fraud, Incompetence Resulted in $500 Million wrongfully spent on Medicaid

Earlier this year, legislative auditor Daryl Purpera served on a Medicaid task force and uncovered a huge discrepancy. The task force compared the financial information provided by 83,000 residents who applied for Medicaid with information they gave to the state’s Department of Revenue seeking tax returns. But the numbers didn’t add up.

Nearly 25 percent of applicants misrepresented their income by $20,000 or more– and 52 percent had different numbers of dependents listed on their tax returns than they did on their Medicaid applications.

Roughly 1.7 million Louisianans are enrolled in Medicaid but taxpayers are paying nearly $500 million to pay for many of those benefits for people who should not be in the program.

Which is why Rep. Tony Bacala, R-Prairieville, introduced House Bill 480, which just passed by a vote of 59 to 30. Next the Senate will vote on the bill; if it passes it will go to Democratic Gov. John Bel Edwards’ desk to be signed or vetoed. Bacala’s bill allows the legislative auditor’s office to verify Medicaid recipients’ tax records.

“It is important that we audit these records. There is evidence of widespread fraud in the system,” Bacala said. He noted that even one percent of fraud equated to roughly $100 million wasted.

Medicaid applicants already sign a waiver to allow their information to be verified and audited by the state’s Department of Revenue, but the department hasn’t verified them. Since the department hasn’t, Bacala proposed that the state’s Department of Revenue share tax information with the legislative auditor’s office so that the legislative auditor could perform the task.

“Nothing in this bill is punitive at all,” Bacala explained. “It is a red flag to help the Department of Health to do its job. There is no penalty created. No crime created.”





“Every one of us here, if we can’t tell the taxpayers of this state that we have ensured the integrity of their tax dollars they give us, that we’re spending their money conscientiously, then we can’t in good conscience continue to ask for their hard-earned dollars. As stewards of the people’s money, let’s make sure it is spent for the purposes for which it is intended.”



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