Auditor General: Waste in DPW Medicaid Payments

With the incoming administration open to his ideas, Auditor General Jack Wagner is laying out ways he thinks Pennsylvania can save money and bridge a likely multi-billion dollar deficit next year.
Governor-elect Tom Corbett is a Republican and Wagner is a Democrat, but again and again during the campaign, Corbett said he’d look at Wagner’s audits for ways to save money.
The Auditor General says he believes the Department of Public Welfare (DPW) is wasting 15 percent of the monthly payments it makes to healthcare providers on behalf of Medicaid patients, by using out-of-date information.

"If, in fact, their status changes and there’s no notification or use of data to update the change in status, the managed care organization continues to receive the monthly payment for months or for years."

Wagner says DPW typically only updates information once a year. He says relevant data can be refreshed quarterly or even monthly.
However, a DPW spokesman tells the Harrisburg Patriot-News federal regulations restrict how often state officials are able to update their information about Medicaid patients.

Wagner stresses he’s not talking about money going directly to patients.

"90 percent of the people receiving medical assistance are getting that not through a fee for service, when they show up at a doctor or hospital and there’s a direct reimbursement. It is through a managed care organization and a monthly capitation payment."

The Auditor General points out a ten percent reduction in Medicaid payments could save more than 400 million dollars.