Medicaid Contracts

Louisiana Health Secretary Rebekah Gee answers questions from the joint Louisiana House and Senate budget committee about new contract awards for the Medicaid managed care program, on Tuesday, Aug. 13, 2019.

It seems odd the problems swirling around Medicaid expansion, one of Gov. John Bel Edwards’ self-proclaimed signature achievements, haven't been more of a campaign issue. On his second day on the job, Edwards signed an executive order expanding Medicaid under Obamacare, creating a half a million new government dependents. The move provided free health insurance to hundreds of thousands of mostly able-bodied adults, many of whom were previously paying for at least a portion of their own insurance costs. The Edwards order would end up adding billions to the cost of running state government. One-third of the state population is now on Medicaid as a result of the expansion.

Wisdom would dictate one might come up with a well thought-out and comprehensive plan before implementing such a drastic, expensive and far-reaching multi-billion-dollar expansion. But it’s clear now the governor’s quick decision after less than 48 hours on the job was ill-advised, and that the state was not ready to handle the billions of dollars in new entitlement spending.

The state Legislative Auditor’s Office reported last year that the Louisiana Department of Health spent as much as $85.5 million of taxpayer dollars on recipients who did not qualify for expanded Medicaid coverage. The auditor also discovered the state enrolled some in Medicaid who hadn't even applied. The audit also found more than 1,600 Medicaid recipients made more than $100,000 a year. Out of 100 expansion beneficiaries the auditor scrutinized, 82 did not qualify for at least some of the payments the state made to Medicaid managed-care companies on their behalf.

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"Without a sufficient process to determine recipient eligibility, LDH cannot ensure that Medicaid dollars are spent appropriately," Legislative Auditor Daryl Purpera wrote to legislative leaders in 2018.

Edwards initially blamed the mess on his predecessor, former Gov. Bobby Jindal. The governor claimed Jindal should have long ago updated the Department of Heath’s computer system. But Jindal didn’t expand Medicaid; Edwards did. In fact, it wasn’t until three years after Edwards expanded Medicaid the state was finally equipped to handle the increase of billions in new entitlement spending.

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Secretary of Health Rebekah Gee blamed the tens of millions wasted on ineligible recipients on the state having to manually determine Medicaid eligibility. She described the process as time-consuming. Last year, Gee announced a new system to check the eligibility of potential Medicaid users was finally in place.

“After more than three years of development, the Department has launched a new automated system for Medicaid eligibility and enrollment that will improve customer service, boost efficiency and increase the accuracy of eligibility decisions,” said Gee.

Gee also admitted the Edwards administration was fully aware the Health Department didn’t have an adequate system in place to handle the expansion of Medicaid when the governor first signed his executive order.

"We needed this system. This was something we knew was an issue at the very beginning of this administration,” said Gee.

 The new system employed last year worked. The state quickly discovered more than 50,000 ineligible Medicaid expansion enrollees. But then five weeks ago, less than a year after the new system was in place, the state abruptly stopped using it.

 “LDH is temporarily suspending the use of the new system until such time as it can ensure that no one who plays by the rules who provides requested information timely is at risk of losing coverage through no fault of their own,” said Jen Steele, LDH Medicaid director.

And yet Steele admits that had the new eligibility system remained active, it would have potentially uncovered an additional 75,000 more ineligible Medicaid recipients.

No doubt Edwards won favor with many of the voters he gave free health insurance to after expanding Medicaid. But if tens of thousands of those recipients were to all of a sudden find themselves kicked off Medicaid roles just weeks before the election, that could change. We’ll never know for sure if the Edwards administration stopped using the new system for political reasons. But don’t be surprised if the state goes back to the more efficient way of determining Medicaid eligibility after the election.

Both of Edwards’ Republican challengers, U.S. Rep. Ralph Abraham and businessman Eddie Rispone, say they will not undo Medicaid expansion if elected. This type of massive entitlement program, once begun, is not easily undone politically. Hopefully, Abraham or Rispone would do a better job of managing the program if elected.

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