Medicaid expenditures have increased by more than $900 million since 2012 amid the move to privatization, according to a legislative auditor’s report released Monday.

Expenditures remained fairly consistent from 2010 through 2012 remaining in the $6.6 billion to $6.8 billion range, the report said. But the spending jumped to $7.57 billion by fiscal year 2014 which ended June 30.

Included is a net increase of $600 million related to Bayou Health spending — the private health insurance program handling health care for more than 900,000 of Medicaid’s 1.4 million recipients.

In addition, there has been an estimated $350 million increase in payments for care of the uninsured to private operators of LSU hospitals.

“You do see the impact of these program,” said Ernie Summerville, assistant director of Financial Audit Services.

But, he said, “there are a lot of other factors that go into the overall determination whether this is costing us that much money. I don’t think we have enough information to say that ... This is looking at one aspect.”

The Medicaid financial data trend was included in a report that identified a series of problems in the state Department of Health and Hospitals’ main office operations, some of them long-standing issues.

For instance, for the seventh straight year the auditor cited improper payments for non-emergency medical transportation. The auditor identified $863,480 worth of payments between July 1, 2013 and June 30, 2014 for services billed that were not in accordance with established policies “for which the state may be liable.”

In one instance, a transportation provider entered into a contract with a medical provider to be its exclusive transportation provider, which flies in the face of Medicaid regulation requiring recipient “freedom of choice.”

DHH Undersecretary Jeff Reynolds said transportation services will be included in Bayou Health plans which should provide a solution to the billings. “Already, a referral has been made to DHH Program Integrity to further investigate whether recoupment of payments to the providers in question should be initiated,” Reynolds wrote.

Among other problems, the Legislative Auditor’s report said that DHH:

  • Disclosed protected health information and personal identifiable information prior to having data-sharing agreements in place with its Medicaid dental benefits program private contractor. In addition, the agency launched the dental program without federal approval of the $484 million contract and paid the contractor before the state Office of Contractural Review approved the agreement.

DHH Medicaid director Ruth Kennedy said federal contract approval was not required prior to enrolling people in the dental plan. She concurred with the other findings, blaming them on a “communications breakdown.”

  • Failed to require Magellan of Louisiana to submit details on behavioral health service claims to ensure timely filing and prompt payment.
  • Paid Medicaid claims of $1.2 million that did not meet federal regulations requiring the filing of original claims within one year of the date of service.

In a statement released Monday, DHH communications director Olivia Watkins said: “The Department is continually working to strengthen the integrity and quality of its programs. While we do not agree with all of the audit’s findings, DHH has taken aggressive steps to implement corrective action and improve services, including new staff education and technology systems to prevent future errors .

Follow Marsha Shuler on Twitter @MarshaShulerCNB. For more coverage of the state capitol, follow Louisiana Politics at