Examine state’s Medicaid expenses

Letter to the editor

Dear Editor,
State Treasurer John Kennedy and Gov. John Bel Edwards traded barbs at a Grow Louisiana Coalition event recently when Kennedy claimed that “state taxpayers are being bilked out of about $830 million by Medicaid fraud.” Gov. Edwards was the next speaker, and he took after Kennedy by saying “payments for any fraudulent services comes out of private companies’ profits — the state is not on the hook for any of it — when people get up here and say things that just sound good, you ought to insist that they be accurate.” So who is right ?
As usual in politics, we have a “play on words,” which is easy to do when discussing something as complex as our Medicaid program. In order to find the truth, lets connect the dots:
Louisiana’s Medicaid Program cost $8.4 billion last year, and a recent study by the U.S. Government Accountability Office stated the Medicaid fraud in Louisiana was found to run at about 10 percent (the national rate was only 6 percent) — or about $830 million just as Mr. Kennedy stated.
Private companies deliver Louisiana’s Medicaid services by paying the physicians and hospitals the $8.4 billion — of which approximately $830 million is fraudulent — just as Gov. Edwards stated.
The federal government and the state then reimburse the private companies by paying them $8.4 billion of “premiums.” The state’s portion of those premiums is its 38 percent “match rate,” or $3.2 billion — of which 10 percent is fraudulent, or $320 million.
Being therefore “accurate,” we can say that Medicaid fraud cost Louisiana taxpayers about $320 million last year — before Medicaid expansion. Speaking of being “accurate,” Gov. Edwards has told us that by expanding Medicaid the state will save $124 million in the first year; that sure does sound good. It would be nice if the governor would tell the taxpayers how he arrived at that number, and more important — what is going to happen to us in the following years? Is the $124 million just bait, and after the Feds have set the hook, the real Medicaid costs start hitting us? After just seeing the states credit rating downgraded in part because of the rapid increase in its Medicaid cost, we ought to insist that we get “accurate” information on Medicaid’s projected future cost, like say in 2020.
Steve Gardes, CPA
Lafayette

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