JLARC Medicaid Review

With Virginia set to add another 400,0000 Medicaid recipients in a few years due to a federal mandate, the General Assembly asked its investigative agency to find out why the program has been making millions of dollars in improper payments.  The Joint Legislative Audit and Review Commission found that most of the mistakes seem to originate in local social services agencies.

Medicaid is the largest program in the state budget, and it often grows by double digits each cycle… making mistakes costly.  The improper payments could be provider or recipient fraud, errors, or intentional abuse.  JLARC Project Leader Ashley Colvin said 20% of Medicaid cases had errors.  “Some improper payments were prevented through pre-payment reviews, fraud resulted in few improper payments, and the most costly improper payments appear to result from agency errors made during the process of enrolling recipients.”

Colvin said the mistakes’ budget impact may be enormous. “The greatest financial risk to the state comes from eligibility errors made by local departments of social services. But our analysis of federal data indicate that improper payments are estimated to have occurred in a range from $18 million to $263 million in federal fiscal year 2009.”

According to Colvin, the dollar range was wide since some recipients may have been eligible, but the paperwork could not prove it.  Better training of caseworkers and replacing outdated software were two JLARC proposals to mitigate errors.

— Anne Marie Morgan

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