The Louisiana Department Of Health Looks Like A Crime Syndicate

Does that sound like an overwrought statement? Well, you’re free to read the 72-page report from the Louisiana Legislative Auditor, released Monday, of its yearly audit of LDH and see if you’re satisfied that the Health Department is a proper steward of the $2.7 billion of your state tax dollars it blows through every year.

Here are just a few highlights from the Legislative Auditor’s summary of the report on the Louisiana Department of Health…

  • LDH, Office of Public Health (OPH) could not provide a detailed listing of food benefits paid, including dollar value, to eligible participants during fiscal year 2021 for the WIC Special Supplemental Nutrition Program for Women, Infants, and Children (WIC).
  • For the fourth consecutive year, LDH did not enroll and screen Healthy Louisiana managed care providers and dental managed care providers as required by federal regulations. As a result, LDH cannot ensure the accuracy of provider information obtained from the Medicaid managed care plans and cannot ensure compliance with enrollment requirements defined by law and the Medicaid and Children’s Health Insurance Program (CHIP) state plan.
  • For the fourth consecutive year, LDH did not perform five-year revalidations; screenings based on categorical risk of fraud, waste, or abuse; and monthly checks of the federal excluded party database, as required by federal regulations for all Medicaid and CHIP fee-for-service (FFS) providers.
  • LDH, OPH lacked internal controls to ensure compliance with regulations over the Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) program related to the activities allowed or unallowed and the allowable costs/cost principles compliance requirements.
  • LDH did not have adequate controls over financial reporting to ensure its financial reports were accurate,
    complete, and prepared in accordance with instructions from the Division of Administration, Office of Statewide Reporting and Accounting Policy (OSRAP).
  • LDH, OPH submitted inaccurate information for the Schedule of Expenditures of Federal Awards (SEFA) for the year ended June 30, 2021.
  • For the second consecutive year, LDH lacked adequate internal controls over eligibility determinations in Medicaid and CHIP for the state fiscal year ending June 30, 2021.
  • LDH failed to properly implement and monitor National Correct Coding Initiative Requirements (NCCI) for Medically Unlikely Edits (MUE) and Procedure-to-Procedure (PTP) edits for the Medicaid FFS claims. Failure to properly implement and enforce all required NCCI edits increases the likelihood that FFS claims, which should be denied, could potentially be paid.
  • LDH did not have adequate controls in place to monitor its contract with Magellan Medicaid Administration, Inc. (Magellan) and was unable to identify a control that would address the timely collection of partially paid drug rebates invoices. Without procedures to address drug manufacturers that do not pay the entire quarterly balance, there is a risk that appropriate rebates will not be collected.
  • For the third consecutive year, LDH, the managed care organizations (MCOs), and Magellan did not have adequate controls in place to ensure that behavioral health services in the Medicaid and CHIP programs were properly billed and that improper encounters were denied.
  • LDH, OPH did not ensure payroll expenditures were timely certified and approved for the Public Health Emergency Preparedness program, the HIV Prevention Activities Health Department Based program, the Epidemiology and Laboratory Capacity for Infectious Diseases program, the WIC Special Supplemental Nutrition Program for Women, Infants, and Children, and the Coronavirus Relief Fund program. This is the second consecutive year payroll internal control deficiencies have been reported for Public Health Emergency Preparedness, HIV Prevention Activities Health Department Based, and Coronavirus Relief Fund.
  • LDH, Office of Behavioral Health, did not ensure payroll expenditures were approved in accordance with agency policy. These expenditures were submitted to the Division of Administration (DOA) for reimbursement by the Coronavirus Relief Fund (CRF) program.
  • For the tenth consecutive year, LDH paid Medicaid Home and Community Based Services (HCBS) claims for the New Opportunities Waiver (NOW) for waiver services that were not documented in accordance with established policies.
  • On October 20, 2021, an Office of Technology Services (OTS) employee unknowingly deleted critical supporting financial records, including certain supporting schedules for its SEFA, on an OPH server during a workstation operating system upgrade. OTS recovered the previously deleted records on December 22, 2021, two months after the initial loss. In addition, an OTS contractor performed periodic backups on a USB drive rather than using more secure and reliable processes.
  • For the third consecutive year, LDH did not have adequate controls to ensure compliance with federal regulations prohibiting the use of federal funding for abortion claims.
  • For the third consecutive year, LDH failed to implement controls to ensure compliance with third-party liability (TPL) requirements for prenatal and pregnancy related services.
  • For the second consecutive year, LDH paid claims totaling $6,833 ($5,032 in federal funds and $1,801 in state funds) in state fiscal year 2021 with service dates occurring after the service providers were no longer enrolled. LDH lacked adequate procedures to ensure claims are only paid for service dates in which the service provider is enrolled.
  • For the fifth consecutive year, LDH failed to maintain evidence of notification of TPL assignment as required for eligibility in the Medicaid and the CHIP programs. Per federal regulations, Medicaid is the payer of last resort.

You probably already know it, but this is how the money gets stolen. Sloppy accounting practices, shoddy record-keeping, poor controls.

You create a big gray area and nobody knows what’s going on, and then there are kickbacks and overpays and all kinds of inappropriate transactions small and large without any real way for an independent researcher to put together the multiple scams being run.

The resources given to the Louisiana Department of Health, which is more than half of the State of Louisiana’s budget every year, should be more than enough to document and explain every dime coming in and out of that agency. And yet every year the Legislative Auditor comes in and does its audit and every year the Legislative Auditor issues a report like this decrying the fact that LDH’s books are nothing even remotely close to being in order.

It’s an agency which defies good governance. And it’s never reined in. The Legislature never bothers to do the hard work of scrubbing LDH’s budget – when doing so could free up hundreds of millions – even billions – of dollars to the state general fund which could be used to fund highway projects everyone knows are overdue. Or coastal restoration projects. Or paying off state debt which remains at alarming level. Or giving the people of Louisiana, who pay state income tax that Texas, Florida and Tennessee residents (and soon, Mississippi residents) don’t have to pay, on top of the highest state and local income taxes in America, some desperately-needed tax relief to kickstart a moribund Louisiana economy.

Instead of doing those necessary things we continue allowing the Louisiana Department of Health to squirrel away money and leak it out to connected vendors and contractors and God-knows-who with poor controls, putrid record-keeping, weak accounting and zero transparency.


And what’s worst about this is there is a mentality among some in the Legislature that reining in this abuse of the public fisc is juice not worth the squeeze. Why? Because it’s federal matching funds which fuel the worst of LDH’s waste. And if you begin gutting its budget to get a handle on the waste, you’ll lose the free money from the feds.

If the federal government were to provide matching funds for human sacrifice there would be state legislators in Louisiana who’d become advocates. It’s nearly that bad.

But not all of the legislators are OK with this. Here was Rep. Larry Frieman this morning after looking over that audit…

Hopefully Frieman’s irritation spreads and a majority in the Legislature will agree to take up the cause of reforming this bloated, corrupt disaster of a state agency. Someday soon the spigot will run dry, and the time will run out to clean up its act.



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