Louisiana Legislative Auditor: A Closer Look at Three Recent Reports

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Louisiana Legislative Auditor:A Closer Look at Three Recent

ReportsMelissa Barbato, Senior Performance Auditor

Cassadara Johnson, Senior Performance AuditorDavid Leingang, Senior Data Analyst

March 12, 2014

Three Recent Reports

• Special Supplemental Nutrition Program for Women, Infants and Children (WIC), Office of Public Health, Department of Health and Hospitals, November 2013

• Medicaid Participant Fees Paid for Deceased Individuals, Department of Health and Hospitals, October 2013

• Monitoring of Non-Secure Residential Contract Providers, Office of Juvenile Justice, January 2014

Special Supplemental Nutrition Program for Women, Infants and

Children (WIC)Melissa Barbato, Senior Performance Auditor

WIC: What is it?

• Special Supplemental Nutrition Program for Women, Infants, and Children

• Federal U.S. Department of Agriculture program

• Louisiana’s $126 million program certified about 145,000 participants in FY12

WIC: Who receives it?

• Pregnant women, breastfeeding women, postpartum women, infants, children up to age 5

• Must meet income requirements• Must be a Louisiana resident• Must have a nutrition-related problem

WIC: What is provided?

• Nutrition education• Healthy foods, such as:– Milk– Eggs– Whole grain bread– Fruits– Vegetables

WIC: How are foods obtained?

• Food instruments

• Redeemed at vendor locations

WIC: Who provides foods?

• WIC vendors are authorized by OPH• 723 vendors across Louisiana in FY12• Vendor types

WIC: Overall audit findings

• OPH should strengthen its process for administering and monitoring vendors and clinics.

• We will discuss four of the nine findings today.

1. WIC vendors assigned to incorrect tiers

• OPH assigns vendors to groups, or tiers• Based on self-reported sales volume and

location• Rural/small sales volume vendors can

generally charge more than large urban vendors

WIC tiers

Tier Description

1 Urban Vendor & $200,000+ in sales

2 Rural Vendor & $30,000-$100,000 in sales

3 Rural Vendor & less than $30,000 in sales

4 Urban Vendor & less than $200,000 in sales

5 WIC Only Vendor6 Above 50% Vendor

7 Rural Vendor & $100,000+ in salesSource: Prepared by legislative auditor’s staff using WIC redemption data, January-June 2013

43% of WIC vendors assigned to incorrect tier

• Some vendors may have charged too much, while others may not have charged enough

• Overall, vendors may have overcharged the program an estimated $655,132

Assigned Tier Correct Tier # VendorsPotential Overcharge / Undercharge

1 7 21 -$31,407.35

3 1 35 $176,329.73

7 1 144 $381,225.29Source: Prepared by legislative auditor’s staff using WIC redemption data, January-June 2013.

Recommendation & Response

• We recommended that OPH develop a review process to ensure it assigns vendors to the correct tier.

• OPH agreed.

2. Vendor prices were not verified

• Attempts to redeem food instruments over the maximum are rejected

• Vendors are required to submit monthly price reports

• OPH did not verify the accuracy of prices

Our review of prices at 3 stores

Vendor Total WIC food items priced

Total accurate prices

Total inaccurate prices – too high

Vendor #1 44 33 11Vendor #2 14 6 8Vendor #3 20 12 8Total 78 51 (65%) 27 (35%)Source: Prepared by legislative auditor’s staff using August 2013 price information.

• We recommended that OPH modify its routine monitoring process to include verification of the vendor’s prices.

• OPH agreed.

3. OPH did not effectively identify/ monitor high risk vendors

• “High risk” vendors have a high probability of program abuse

• Federal requirements• FY12 discrepancy: 24 or 5 high risk vendors?• No required FY12 activity documented for 2

of the 5 high risk vendors

Improve monitoring through data analysis

• Smaller vendors redeemed large numbers of transactions over time:– One vendor had over 38,000 paid

transactions totaling approximately $873K in FY13

• Vendors with high numbers of “even dollar” transactions:

Vendor (Top Five) # Even Dollar Transactions Total Amount

Vendor #1 1,311 $32,944Vendor #2 1,081 $7,721Vendor #3 702 $23,183Vendor #4 483 $14,740Vendor #5 455 $17,214Total 4,032 $95,802Source: Prepared by legislative auditor’s staff using redemption data and other OPH vendor data.

• Vendors consistently redeemed at/near the maximum amount:

% Maximum # Vendors Amount

95 375 $58,209.7696 315 $56,214.9597 339 $71,267.8998 290 $66,729.8299 268 $39,991.68100 206 $48,471.25

Source: Prepared by legislative auditor’s staff using data from Solutran.

• Vendors with high numbers of returned food instruments:

Return Reason # Vendors Amount

Stale Dated 153 $13,373.88Early Cashing 465 $117,480.66Altered 427 $138,758.51Unreasonable Dollar Amount (Above Max for Food Instrument) 611 $724,155.81Source: Prepared by legislative auditor’s staff using data from Solutran.

• We recommended the following to OPH:– Correctly report number of high risk vendors– Investigate high risk vendors as required– Adopt analyses similar to those presented in

the report and other analyses as identified• OPH agreed.

4. OPH did not always sanction vendors for violations

• Enforcement authority in several sources; however, these sources are inconsistent

• FY12 enforcement actions:– Disqualified one vendor– Issued no penalties– Did not track warning letters sent

OPH did not follow up on identified stock violations

• Counting WIC food inventory during routine monitoring

• OPH sent 71 warning letters in the sample we reviewed

• However, there were 90 total stock violations in our sample

Multiple instances of unsanitary conditions with no OPH action

• Nine documented instances with no follow up

• May/September 2013 observations• Complaint regarding expired infant formula

OPH did not always escalate sanctions for repeat violations

• Warning letter -> 90 day disqualification or penalty

• 6 of the 75 vendors in our sample had repeat violations but only received a warning letter

• Informal/nonspecific correction action plans accepted

• Some of our recommendations to OPH included:– Ensure sanctions are consistent across sources– Address unsanitary conditions– Develop template for corrective action plans– Develop sufficient tracking system to detect

patterns/improve effectiveness

• OPH agreed.

Medicaid Participant Fees Paid for Deceased Individuals

David Leingang, Senior Data Analyst

Overview

• Data Analytics Unit

• Project

Data Analytics Unit

• Who – Subunit of Performance Audit• What – Analyze Data• When – November 2012• Where – State Agencies• Why – Do more with less, Proactive• How – ACL and Excel

Louisiana Medicaid

• Bayou Health and Louisiana Behavioral Health Partnership

• Eligibility Determination• Per member per month fees

Objective

• To determine if DHH paid Medicaid participant fees for deceased individuals in the Louisiana Behavioral Health Partnership and Bayou Health programs between February 1, 2012, and June 30, 2013.

Data Obtained

• DHH – Medicaid–All payments made between

2/1/2012 and 6/30/2013 • DHH – Vital Records–Deceased data from 1991

Methodology

• Compared the deceased individuals from Vital Records to the Medicaid claims paid to determine if any payments were made for claims occurring after a participant’s death

Results

Before February 1, 2012

Between February 1, 2012 and March

31, 2013

After March 31, 2013

$200,000

$400,000

$600,000

$800,000

$1,000,000

$1,200,000 $984,165

$796,305

$69,004

Payments for Deceased Individuals

Date of Death

Results

Before February 1, 2012 Between February 1, 2012 and March 31, 2013

After March 31, 20130

Number of Participants

Date of Death

ResultsLa

s of A

Bayou Health Louisiana Behavioral Health Partnership

$- $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 $700,000

$598,965 $527,341

$441,216

$15,625 $8,364

$257,963

Breakdown of Payments by Entity

Conclusion

• DHH does not have a sufficient process in place for identifying deceased Medicaid participants in a timely manner

• According to DHH management, the department should be able to recover the payments identified in this report.

DHH Management Response

Office of Juvenile Justice (OJJ):Monitoring of Non-Secure

Residential Contract ProvidersCassadara Johnson, Senior Performance Auditor

Office of Juvenile Justice

Objective: To determine if OJJ has improved its monitoring of non-secure residential contract providers since our 2010 performance audit.

OJJ Background

• We followed up on 14 recommendations related to monitoring of contract providers.

Status of OJJ RecommendationsAs of June 30, 2013

Recommendation Status Number of Recommendations Percentage

Implemented 8 58%

Partially Implemented 3 21%

Did Not Implement 3 21%

Total 14 100%Source: Prepared by legislative auditor’s staff using information obtained from OJJ.

OJJ Background

• OJJ had 12 non-secure residential contracts totaling over $42.9 million.

• Contract terms are approximately two to four years, with the oldest contract beginning September 2011.

Noncompliance with State Law

• La.R.S. 15:1084 requires OJJ to use a formula to determine the rates for non-secure residential contracts.

• Rates paid to contract providers ranged from $112.65 per day to $258.62 per day for similar services.

• Recommendation: Establish a formula to establish rates for non-secure residential facilities as required by law.

No Financial Monitoring

• No financial monitoring conducted to ensure that contract providers operate within their budgets.

• No verification that invoiced amounts were spent on required services.

• Recommendation: Develop a risk based approach for monitoring whether contract providers are operating within their budgets.

Contract Monitoring:Monitoring Tools

• OJJ’s monitoring tools did not address all contract requirements.

• Some examples include:– Substance Abuse Treatments–Psychiatric Consultation–Behavior Management– Education Assessments

Contract Monitoring:Tracking Results

• OJJ had no comprehensive system to track monitoring results.–OJJ did not record any results from its

monthly monitoring visits

As a result, OJJ could not track deficiencies of contract providers over time and ensure that sanctions were consistently imposed.

Contract Monitoring: Outcome Data

• OJJ did not ensure outcome data collected from contract providers was complete.– All annual outcome reports submitted by contract

providers for fiscal year 2013 were incomplete.– Contract providers failed to report over 50% of the

required outcome measures.However, OJJ did not review the outcome measures that contract providers did submit.

Contract Monitoring:Outcome Data Not Reported

Number of Outcome Measures Providers Failed to ReportFiscal Year 2013

ProvidersNumber of Measures Providers

Failed to Report(out of 24 Required Measures)

Boys Town of LA 23 96%AMI Kids 23 96%Community Receiving Home (Renaissance) 22 92%Rutherford House 21 88%Harmony Center- Harmony III Group Home 19 79%Harmony Center- Camelia Group Home 19 79%Johnny Robinson's Boys Home 19 79%Christian Acres Youth Center, Inc. 17 71%Educational & Treatment Council 7 70%Allen's Consultation & Training 15 63%Boys and Girls Villages 15 63%Ware Youth Center 6 55%Source: Prepared by legislative auditor's staff using provider annual reports.

Contract Monitoring

• Recommendations:– Ensure monitoring tools address all contract

requirements.– Develop a system to track monitoring results and

use this data to manage the overall monitoring process.

– Monitor the annual outcome reports submitted from all providers and use this information to evaluate the quality and effectiveness of services provided.

Magellan Health Services

• OJJ entered into a two-year, $12 million contract with Magellan to manage 5 of the 12 non-secure residential contracts.

• OJJ had not developed a monitoring plan as required by this contract.

• Recommendations: – Develop a plan to monitor Magellan’s oversight of the 5

Louisiana Legislative Auditor: A Closer Look at Three Recent Reports

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