Tuesday, December 20, 2011

Audit of Wisconsin’s Medical Assistance Programs Released: Suggests Improvements in Program Administration and Transparency

Today, the Legislative Audit Bureau released their 100+ page report on Wisconsin’s Medical Assistance (MA) programs, including BadgerCare Plus, Medicaid, and long-term care programs. The economic downturn, as well as eligibility expansions, has increased the number of MA recipients to 1.2 million in January 2011 – boosting expenditures from $5 billion in fiscal year 2006-07 to $7.5 billion in fiscal year 2010-11. The vast majority of that $2.5 billion increase, 87%, was federally funded.

The audit report highlights a few key areas of MA, including program expenditures, administration, managing service delivery, and confirming eligibility. One particular area of interest, especially considering the national and state emphasis on managed care, was the finding that in January 2011, 61.3% of all recipients received services through managed care. Some people are not able to enroll in managed care because there aren’t HMOs serving their area, and others use fee-for-service care for things their HMO doesn’t offer. However, the audit recommends, to the extent possible, enrolling people more quickly in managed care, to control costs.

The audit also discusses the limited data systems and availability of basic information within the Department of Health Services (DHS), and the minimal use of this data in budgeting. With regard to contractual services, the audit points out that DHS has not always considered available spending authority when making contract decisions, which is important because of the increased reliance of the department on vendors for contracted services. The MA funded expenditures are also not all included in the MA budget or recorded as program expenditures. This finding relates to the overarching finding that the data systems and budget practices (including increased use of contractors) limit DHS’ ability to effectively manage and oversee the MA program.

The audit report didn’t turn up any evidence of significant fraud in Medicaid. As Rep. John Richards said in a press release this afternoon: “Today’s report debunks the myth long perpetuated by some lawmakers that widespread fraud exists in the state’s health care programs or that people are moving to Wisconsin solely to obtain Medicaid benefits.” 

A press release from the co-chairs of the Audit Committee, Senator Cowles and Rep. Kerkman, doesn’t contradict that assessment, but puts more focus on fraud prevention: “Improving our Medical Assistance program should assure that only eligible Wisconsinites receive benefits from our state’s generous program and that spending can be as transparent as possible,” Rep, Kerkman said. 

In a follow-up blog this week, we will take a closer look at the recommendations the audit made to DHS, as well as DHS’ response.

Sara Eskrich and Jon Peacock

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