Problems found in program for low-income patients

Issues that allowed $1.8 million fraud left uncorrected

December 13, 2010|By Meredith Cohn, The Baltimore Sun

State health officials have failed to take sufficient action to control costs and prevent abuse of programs that provide-low income Marylanders with health care benefits, according to an audit of the Medical Care Programs Administration released Monday.

The routine review by the Office of Legislative Audits, an agency of the General Assembly, comes two years after a former state employee pleaded guilty to stealing nearly $1.8 million from the state Kidney Disease Program.

Officials said Donna McRae Lam had set up fictitious health care providers to collect payments for false claims. The auditors say the Medical Care Programs Administration "did not fully correct procedures and control deficiencies" that left the program vulnerable to fraud.

The auditors, who reviewed the period from September 2005 to June 2009, found that some problems that made the abuse possible have not been corrected.

They also found that officials had failed to establish adequate procedures to determine patient eligibility for programs and to verify data used to compute payments to managed-care organizations. That means some people could collect Medicaid services for which they are not eligible.

The Medical Care Programs Administration, which is part of the state Department of Health and Mental Hygiene, spent about $6.8 billion on behalf of about 881,000 people in fiscal 2010.

Bruce A. Myers, chief of the Office of Legislative Audits, said the size of that expenditure makes the administration an appealing target.

"There is so much money here that if you address some of these issues the state could really have financial benefits," he said.

Myers said the audit, done every three years, showed some improvement at the administration. Auditors found 20 issues in their 2006 report, with many findings unresolved from the audit before that one. The current audit had 14 findings with few ongoing problems.

State health officials say they agree with the bulk of the findings.

"We think we've made a lot of improvements in our programs," said John Folkemer, Maryland's deputy secretary of Health and Mental Hygiene for health care. "We're going to make some more changes, or have already made some changes."

In the kidney program, specifically, Folkemer said, the process has been altered to require more checks by more staff, and he's "quite confident" that the fraud could not be repeated.

He added that other changes would require additional staff to look for anomalies in billing, for example. And a new computer system would be needed to do more analysis. But that's not in the current budget.

Officials will have a chance Tuesday to discuss possible solutions during a hearing of the Legislature's Joint Audit Committee.

meredith.cohn@baltsun.com

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