Many predicted partisan pyrotechnics would ignite when a proposal to allow the legislative auditor’s office to verify Medicaid recipients’ tax records came up for final approval Thursday and, for more than an hour, the Louisiana House did not disappoint.
In the end, House Bill 480, sponsored by Rep. Tony Bacala, R-Prairieville, passed in a contentious 59-30 vote. The bill now moves onto the Senate where, if adopted, it faces an uncertain fate on Democratic Gov. John Bel Edwards’ desk.
Bacala said Legislative Auditor Daryl Purpera, while serving on a Medicaid task force earlier this year, compared information provided by 83,000 residents applying for Medicaid with information they provided to the state’s Department of Revenue seeking tax returns.
Purpera’s preliminary analysis determined up to 25 percent of applicants misrepresented income by $20,000 or more, and 52 percent had variations in the number of dependents listed on their tax returns, Bacala said.
With 1.7 million Louisianans now enrolled in Medicaid, whether it is through purposeful fraud or mistakes, Louisiana taxpayers may be paying nearly $500 million a year to subsidize health costs for people who don’t belong in the program.
“It is important that we audit these records. There is evidence of widespread fraud in the system,” Bacala said. “Every 1 percent [of detected fraud] is worth $100 million.”
Bacala said the bill would allow the state’s Department of Revenue to share tax information with the legislative auditor’s office.
He said Medicaid applicants sign a waiver that allows their information to be verified and audited, but the state has failed to do so.
”The intention of the audit is to pull the data and check the outliers. If they deserve further review, it will be referred to the Department of Health,” he said. “Nothing in this bill is punitive at all. It is a red flag to help the Department of Health to do its job. There is no penalty created. No crime created.”
Bacala was confronted with heated broadsides leveled by Democrats, who insisted his proposal targets the poor while ignoring corporations, providers and practitioners.
“The evidence is when Medicaid fraud happens, it is typically on the part of provider, not the person” receiving the subsidy, said Rep. Gary Carter, D-New Orleans.
“I do not agree,” Bacala said. There may an “equal” amount of fraud between providers and individuals, but state and federal officials don’t audit “the recipient side” the way they do providers and practitioners.
“This is outrageous,” Carter said. “I think we should stand by the working people of the state. This is a bad bill and I pray we vote it down.”
“We start going down a slippery slope when we start to look at working class families’ income tax and look, specifically, for anybody who has applied for Medicare,” said Rep. Denise Marcelle, D-Baton Rouge, questioning how a previous year’s W-2 can be used to audit an applicant’s eligibility in the present year.
Rep. Robert Johnson, D-Marksville, said the state’s Department of Revenue is against auditing Medicare recipients in an “apples to orange approach” with tax returns from the previous year.
“Let’s get real with this program,” Johnson said. “Federal law allows people to divest themselves of property to qualify for Medicaid. (They) could give (assets) to their children. Do you think that is fraud?”
“Yes, sir, I do,” Bacala said.
Rep. Barbara Norton, D-Shreveport, sponsored an amendment requiring audits for all Medicare providers as well as for all Medicare and Medicaid recipients.
“Include everybody,” she said.
“Why would the poor have to commit fraud to receive Medicare?” Rep. Dodie Horton, R-Haughton, incredulously asked Norton. “Why would the poor have to commit fraud?”
“That question should be put to my collegiate,” Norton replied.
Norton’s amendment was shot down 54-34.
Bacala re-emphasized that the audits would merely identify “red flags” in conflicting information that can often be cleared up in a “25 second” phone call.
“Every one of us here, if we can’t tell the taxpayers of this state that we have ensured the integrity of their tax dollars they give us, that we’re spending their money conscientiously, then we can’t in good conscience continue to ask for their hard-earned dollars,” Bacala said. “As stewards of the people’s money, let’s make sure it is spent for the purposes for which it is intended.”