Medicaid report fans GOP flame

LITTLE ROCK — Legislative auditors released a GOP-requested report on the state’s Medicaid program Friday that turned up a provider convicted of a sex crime who mainly served children, improper payments and what Republicans say is proof that the agency’s fraud detection needs to be strengthened.

Gov. Mike Beebe and state Department of Human Services officials said any problems will be fixed but nothing “systemic” needs to be overhauled in the $5 billion program that covers about 780,000 poor Arkansans.

The Republican lawmakers who requested the special report, which reexamined already-public data from 2009-11 and added fresh 2012 numbers, said the results indicated a need for hearings on legislation to fix Medicaid.

“I think it just highlights some of the structural problems in Medicaid,” said House Majority Leader Bruce Westerman, a Hot Springs Republican.

Sen. David Sanders, R-Little Rock, said the study gives lawmakers good information as they decide whether to expand Medicaid under the federal Patient Protection and Affordable Care Act of 2010.

“We have to fix what we have now before we think about expanding,” Sanders said. “We have to walk and chew gum at the same time, have conversations about expanding, but also have conversations about fixing things. I think we’ve begun the process of fixing things. I’m encouraged.”

The report’s findings shouldn’t influence the debate either way, said Matt DeCample, Beebe’s spokesman.

“It shouldn’t stand in the way of expansion,” DeCample said.

The Department of Human Services disputed many of the findings in the report, but department spokesman Amy Webb said the agency was satisfied with its improved working relationship with legislative auditors.

“We noted some concerns and disagreements. That’s not unusual. We feel like we worked really well together,” she said.

The report had been delayed a week after Beebe, the Human Services Department and Republicans sparred over its methodology and timing. Joint Legislative Audit Committee Chairman Sen. Bryan King, a Green Forest Republican, said Friday that he would see what committee members wanted to do before he called a meeting.

“I’m just going to wait and see,” King said.

Westerman said he wanted to meet with Human Services Department officials to answer questions, especially about “structural problems” at the agency. The department’s program-integrity unit didn’t have sufficient latitude to investigate fraud and abuse, he said.

Legislative auditors said the anti-fraud unit didn’t issue six reports on home and community-based service providers “at the request of management.”

“It doesn’t specifically say who buried them,” Westerman said.

Webb said agency fraud investigators “have access to [state Medicaid Director] Andy Allison or [Human Services Director] John Selig whenever they need it.”

Still, she added, the Human Services Department is willing to review its organizational structure.

“It’s something we can look at to see if there is a better way to do it,” she said.

Sanders and Westerman have introduced legislation to overhaul some parts of the Medicaid program, tightening eligibility procedures and bolstering the fraud unit. The bills likely will be discussed in committee in the next week or two, Sanders said.

“We’re trying to do everything we can to make sure taxpayer dollars are being spent correctly,” Sanders said.

DeCample said the Medicaid report showed no major problems that suggested major renovations are needed in the program.

“As always there are some areas in which DHS needs to do some work; they will do that work. But there is nothing that we see on any front that indicate systemic problems that need to be addressed,” DeCample said.

Other findings in the report:

Dr. Lonnie Parker of Hope, convicted in federal court in 2000 of possession of sexually explicit material involving sexual exploitation of a minor, didn’t follow provider rules and notify the Human Services Department of his conviction.

The department responded that nothing in Parker’s history suggested any impropriety in his practice or care. And since the department already knew of Parker’s conviction, there was no need for him to notify the agency. The Arkansas State Medical Board reinstated Parker’s license, the department noted. The report noted that the majority of Parker’s patients were minors.

“I find that very disturbing,” Sanders said.

A patient-privacy violation involving health information. The Human Services Department said it had implemented new security measures.

An error rate of 14 percentage points in a sample of 149 recipients’ eligibility. Overall, the report listed $1.3 million in payments to ineligible recipients since 2009.

The patients in the sample were “spend-down” recipients who had encountered sudden, catastrophic illnesses or conditions that depleted their assets, Webb said.

The “medically needy” group numbers about 1,000 out of 780,000 Medicaid recipients. The medically needy is a particularly difficult group to evaluate because of complex and often tangled financial and medical records, she said.