John Locke Update / Research Brief

New audit finds a disturbing lack of oversight in Medicaid program

posted on in Health Care, Health Care & Human Services
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  • A new audit reveals severe shortcomings in Medicaid’s process to review the eligibility of Medicaid providers
  • Many providers lacking licensing or credentials continued to see patients and bill the taxpayer-funded program
  • The audit is yet another reason to oppose Medicaid expansion

Imagine your mother, wife, or sister getting medical treatment from a physician’s assistant who, you later find out, had his license suspended for “allegations regarding inappropriate exams of female patients” and “watching pornography while on duty in an emergency department.”

In North Carolina, that’s exactly what happened to 564 patients between April 2018 and June 2020.

It was among the most alarming findings of an audit of North Carolina’s Medicaid providers performed by the state auditor’s office.

According to the auditor’s report, the objective of the audit “was to determine whether the Medicaid Provider Enrollment process ensures that only qualified providers are approved to provide services to Medicaid beneficiaries and to receive payments from North Carolina’s Medicaid program.”

The audit found that the state Department of Health and Human Services’ (DHHS) Division of Health Benefits enrollment process failed in that endeavor.

The lack of oversight created “an increased risk that providers whose actions posed a threat to patient safety” continued to practice, and the audit also identified nearly $120 million in reimbursements to providers who potentially should not have been enrolled in the program.

Indeed, the physician assistant noted above generated approximately $1.6 million in Medicaid reimbursements during the time evaluated.

“The Division did not identify and remove providers who had their licenses suspended or terminated by professional state licensing boards,” the audit continues, which included eight providers whose license was suspended or terminated for substance abuse, six for unprofessional conduct, and two for sexual misconduct/inappropriate behavior toward women.

The audit cites several other examples of unlicensed practitioners, those with licensing limitations, or uncredentialed providers treating Medicaid patients and receiving millions of dollars in reimbursements.

Other providers with licensing limitations who were nevertheless allowed to participate in Medicaid include:

  • A physician who was prohibited from treating female patients without a chaperone because of past “sexual and professional misconduct” allegations had treated 208 female patients during the time frame audited
  • A dentist whose general anesthesia permit was suspended following the death of a patient had billed 119 patients
  • An oral surgeon whose dental license was terminated after the death of a patient and who also was found to have committed Medicaid fraud was still allowed to continue as a medical provider for Medicaid patients

The lack of oversight of the $17 billion program that covers 2.1 million North Carolinians is troubling to say the least.

In their response to the audit’s findings, DHHS said it is working to remove the providers lacking the appropriate licensing or credentials and to “strengthen our ongoing credential monitoring.”

Time will tell.

With a budget already approaching $20 billion, the Medicaid program’s inability to ensure even the most basic safeguards of patient safety and financial accountability does not instill much confidence.

Keep this in mind, too, when Medicaid expansion advocates insist that North Carolina add another 600,000 people to this already overcrowded system rife with fraud and incapable of even keeping possible sexual predators from examining female patients.

Critics of the audit may dismiss the findings by saying the number of illegitimate providers is inconsequential compared with the roughly 90,000 total providers in the system.

Try telling that to the loved ones of the 208 female patients who were unknowingly treated and examined by a physician previously disciplined for sexual misconduct.

Brian Balfour is Senior Vice President of Research for the John Locke Foundation, where he oversees the organization’s research and analysis on a variety of issues. He previously worked for the Civitas Institute for 13 years, and has a master’s… ...

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