The Legislative Auditor has a new report detailing evidence the Department of Health and the Attorney General’s Office both misappropriated money intended for the Medicaid Fraud Fund. Auditor Daryl Purpera says they initiated the investigation at the request of LDH and the AG’s office, who’ve since put the money back in the program.

“During this year, they were able to claw back those funds and put them into the Fraud Fund. It is in the proper place now, but it just didn’t get there during that time period.”

LDH misallocated $2.8 million from 2012 to 2017, and the AG’s office did not deposit $712,000 into the fund in 2016.

When companies overcharge the state for services, they pay a fine and return the overpaid amount of money. Purpera says when it’s working, this system funds the system that prevents future fraud cases involving private care providers.

“First, the amount to make the state hold and the federal government hold is to go back to the state and federal government and what is left over would go into the Fraud Fund to be used to fight fraud in the future.”

Purpera says auditors also found $475,000 in salaries for fraud detection were used for other purposes and the report showed the state blew $642,000 in 2012 on software not compatible with their systems, and couldn’t be used. He says they did not get a refund.

“They had some internal problems where it wasn’t compatible software. We basically bought 2,017 Microsoft Dynamics licenses and could not use them.”

LDH responded to the most recent audit and provided four facts:

  • “The Louisiana Department of Health, under this Administration, immediately took steps to begin correcting the problems as soon as they were brought to our attention."
  • “The transfer of $2.79 million from one account to the Fraud Fund was made less than a month after the situation was recognized.”
  • “LDH is currently updating job descriptions and correcting how costs are allocated.”
  • "Fraud-fighting and fraud prevention efforts were never compromised.”