Legislative Audit Finds Rampant Waste, Fraud in Utah’s Medicaid Program

A newly-released legislative audit finds that Utah’s Medicaid is—you guessed it—rife with waste and fraud. The Salt Lake Tribune reports:

Millions of tax dollars are likely being wasted in Utah’s Medicaid program on procedures — including a breast augmentation and nose jobs — that aren’t covered by the government insurance program, according to a scathing legislative audit released Tuesday.

Millions more are lost because the Medicaid department isn’t adequately going after providers who submit fraudulent bills. And while there are three sets of internal auditors charged with overseeing the department and its $1.7 billion budget, none are independent enough to do their jobs appropriately, the report says.

“I don’t know that I’ve read a more damning report,” said House Speaker Dave Clark, R-Santa Clara, during a Tuesday legislative meeting. He called leaders of Medicaid and the health department “somewhat lazy and sloppy.”

“Every single page of this audit talks about lack of leadership, lack of management, lack of organization, lack of follow up,” he said. “Lack of, lack of, lack of. … I’m concerned.”

The audit reviewed Medicaid’s Bureau of Program Integrity, which is responsible for protecting Medicaid from provider fraud, waste and abuse through avoiding unnecessary costs and recovering wrongly paid bills. It was reorganized in 2008 in response to “growing concerns” by the federal government about “Utah’s commitment to Medicaid integrity,” according to the audit, which nevertheless found the bureau lacking.

“We believe there is significant room for improvement in BPI’s operations, which can result in significant savings over time for the Medicaid program,” Tuesday’s audit states.

David Sundwall, the executive director of the Utah Department of Health, and Michael Hales, its Medicaid director, did not dispute the audit’s findings. “We accept all the recommendations of the audit and have begun the work required to implement them,” they said in a written response, adding that some changes may require additional funding.

While auditors said they couldn’t pinpoint exact dollar figures of potential savings with reform, they estimated at least $20 million savings in federal and state dollars.

Read the whole article—and the full audit report here—for a clinic on why it’s absolutely essential to routinely look under the hood of government programs. How many more tax dollars would have been wasted had this audit not been performed? Even more frightening, what would we find if we pulled up the rug on every other government program?

There’s a separate lesson here about the folly of letting governments run health care enterprises, but that’s a whole ‘nother can of worms.