March 7, 2012

Improper Medicaid payments revealed

A computer glitch allowed coverage for as many as 19,000 ineligible Mainers; now the state's on the hook.

By John Richardson
Staff Writer

AUGUSTA - Maine will likely have to repay the federal government for covering Medicaid claims for as many as 19,000 ineligible patients in the past year and a half, Health and Human Services Commissioner Mary Mayhew said Wednesday.

"There will be an audit," Mayhew told lawmakers soon after talking with federal officials. And, to the extent that claims were paid improperly, she said, "there will be a requirement to pay those funds back."

Computer problems are being cited as the cause of the errors, but no one knows yet how much money was paid out improperly, or how much the state may owe the federal government. Mayhew said it will take four weeks to figure out the extent of the problem.

Lawmakers who have been working for months to balance the Department of Health and Human Services' budget learned of the mistake Tuesday, and said Wednesday that it leaves them even less confident in the department's budget numbers.

The news led to accusations that the LePage administration kept the information from lawmakers, who last month had to make painful cuts to MaineCare, the state's Medicaid program.

"We have questions about why that information was withheld from us," said Rep. Peggy Rotundo, D-Lewiston, a member of the Legislature's Appropriations Committee. "And is this the tip of the iceberg?"

Medicaid is a state-administered program that provides medical coverage to the poor and disabled. About two-thirds of the cost of claims is paid by the federal government.

Mayhew said she spoke to federal officials Wednesday about the latest problem with MaineCare's computerized eligibility and claims systems. She said she expects to meet soon with federal Medicaid officials from Boston.

Mayhew also briefed lawmakers Wednesday, insisting that she learned about the significance of the problem only last week.

She said a computerized claims system launched in the summer of 2010 never communicated properly with the state's eligibility system.

From September 2010 to January 2012, an estimated 19,000 MaineCare enrollees were sent letters telling them they were no longer eligible for coverage. But their coverage was never cut off, so any medical claims they submitted would have been paid by the state.

"They may not have read the letter or understood the letter, and their (MaineCare) cards remained active," Mayhew said.

She said her department is still trying to determine how many of those 19,000 people got Medicaid-covered services they were not eligible to receive. She has told lawmakers that the overpayment may total about $7 million, but lawmakers said they believe that number is low.

Dropping 19,000 people who were incorrectly considered eligible may lower MaineCare costs and reduce the need for additional cuts in fiscal year 2012-13. At the same time, the state could be forced to repay an even larger amount to the federal government.

Sen. Margaret Craven, D-Lewiston, asked Mayhew why she didn't tell the Appropriations Committee weeks ago, during an extensive series of budget-balancing sessions.

"I'm asking why they weren't told that something could be very wrong," Craven said.

Democrats noted that Gov. Paul LePage repeatedly grew frustrated that lawmakers were asking so many questions about the shortfall he cited as the reason that cuts were needed.

Mayhew said the error was one of many problems identified when the new claims system was launched in 2010, but she didn't learn about it until late January of this year. She asked for an internal review and was told about the magnitude of the error last week, when she informed the governor.

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