Louisiana Legislative Auditor: A Closer Look at Three Recent Reports

1. Louisiana Legislative Auditor: A Closer Look at Three Recent Reports Melissa Barbato, Senior Performance Auditor Cassadara Johnson, Senior Performance Auditor David Leingang, Senior Data Analyst March 12, 2014

2. Three Recent Reports Special Supplemental Nutrition Program for Women, Infants and Children (WIC), Office of Public Health, Department of Health and Hospitals, November 2013 Medicaid Participant Fees Paid for Deceased Individuals, Department of Health and Hospitals, October 2013 Monitoring of Non-Secure Residential Contract Providers, Office of Juvenile Justice, January 2014

3. Special Supplemental Nutrition Program for Women, Infants and Children (WIC) Melissa Barbato, Senior Performance Auditor

4. WIC: What is it? Special Supplemental Nutrition Program for Women, Infants, and Children Federal U.S. Department of Agriculture program Louisiana’s $126 million program certified about 145,000 participantsin FY12

5. WIC: Who receives it? Pregnant women, breastfeeding women, postpartum women, infants, children up to age 5 Must meet income requirements Must be a Louisiana resident Must have a nutrition-related problem

6. WIC: What is provided? • Nutrition education • Healthy foods, such as: • Milk • Eggs • Whole grain bread • Fruits • Vegetables

7. WIC: How are foods obtained? Food instruments Redeemed at vendor locations

8. WIC: Who provides foods? WIC vendors are authorized by OPH 723 vendors across Louisiana in FY12 Vendor types

9. WIC: Overall audit findings OPH should strengthen its process for administering and monitoring vendors and clinics. We will discuss four of the nine findings today.

10. 1. WIC vendors assigned to incorrect tiers OPH assigns vendors to groups, or tiers Based on self-reported sales volume and location Rural/small sales volume vendors can generally charge more than large urban vendors

11. WIC tiers

12. 43% of WIC vendors assigned to incorrect tier • Some vendors may have charged too much, while others may not have charged enough • Overall, vendors may have overcharged the program an estimated $655,132

13. Recommendation & Response We recommended that OPH develop a review process to ensure it assigns vendors to the correct tier. OPH agreed.

14. 2. Vendor prices were not verified Attempts to redeem food instruments over the maximum are rejected Vendors are required to submit monthly price reports OPH did not verify the accuracy of prices

15. Our review of prices at 3 stores

16. Recommendation & Response We recommended that OPH modify its routine monitoring process to include verification of the vendor’s prices. OPH agreed.

17. 3. OPH did not effectively identify/ monitor high risk vendors “High risk” vendors have a high probability of program abuse Federal requirements FY12 discrepancy: 24 or 5 high risk vendors? No required FY12 activity documented for 2 of the 5 high risk vendors

18. Improve monitoring through data analysis • Smaller vendors redeemed large numbers of transactions over time: • One vendor had over 38,000 paid transactions totaling approximately $873K in FY13

19. Improve monitoring through data analysis Vendors with high numbers of “even dollar” transactions:

20. Improve monitoring through data analysis Vendors consistently redeemed at/near the maximum amount:

21. Improve monitoring through data analysis Vendors with high numbers of returned food instruments:

22. Recommendation & Response • We recommended the following to OPH: • Correctly report number of high risk vendors • Investigate high risk vendors as required • Adopt analyses similar to those presented in the report and other analyses as identified • OPH agreed.

23. 4. OPH did not always sanction vendors for violations • Enforcement authority in several sources; however, these sources are inconsistent • FY12enforcement actions: • Disqualified one vendor • Issued no penalties • Did not track warning letters sent

24. OPH did not follow up on identified stock violations Counting WIC food inventory during routine monitoring OPH sent 71 warning letters in the sample we reviewed However, there were 90 total stock violations in our sample

25. Multiple instances of unsanitary conditions with no OPH action Nine documented instances with no follow up May/September 2013 observations Complaint regarding expired infant formula

26. OPH did not always escalate sanctions for repeat violations Warning letter -> 90 day disqualification or penalty 6 of the 75 vendors in our sample had repeat violations but only received a warning letter Informal/nonspecific correction action plans accepted

27. Recommendation & Response • Some of our recommendations to OPH included: • Ensure sanctions are consistent across sources • Address unsanitary conditions • Develop template for corrective action plans • Develop sufficient tracking system to detect patterns/improve effectiveness • OPH agreed.

28. Medicaid Participant Fees Paid for Deceased Individuals David Leingang, Senior Data Analyst

29. Overview • Data Analytics Unit • Project

30. Data Analytics Unit Who – Subunit of Performance Audit What – Analyze Data When – November 2012 Where – State Agencies Why – Do more with less, Proactive How – ACL and Excel

31. Louisiana Medicaid • Bayou Health and Louisiana Behavioral Health Partnership • Eligibility Determination • Per member per month fees

32. Objective To determine if DHH paid Medicaid participant fees for deceased individuals in the Louisiana Behavioral Health Partnership and Bayou Health programs between February 1, 2012, and June 30, 2013.

33. Data Obtained • DHH – Medicaid • All payments made between 2/1/2012 and 6/30/2013 • DHH – Vital Records • Deceased data from 1991

34. Methodology Compared the deceased individuals from Vital Records to the Medicaid claims paid to determine if any payments were made for claims occurring after a participant’s death

35. Results

36. Results

37. Results

38. Conclusion DHH does not have a sufficient process in place for identifying deceased Medicaid participants in a timely manner According to DHH management, the department should be able to recover the payments identified in this report.

39. DHH Management Response

40. Office of Juvenile Justice (OJJ): Monitoring of Non-Secure Residential Contract Providers Cassadara Johnson, Senior Performance Auditor

41. Office of Juvenile Justice • Objective: To determine if OJJ has improved its monitoring of non-secure residential contract providers since our 2010 performance audit.

42. OJJ Background • We followed up on 14 recommendations related to monitoring of contract providers.

43. OJJ Background OJJ had 12 non-secure residential contracts totaling over $42.9 million. Contract terms are approximately two to four years, with the oldest contract beginning September 2011.

44. Noncompliance with State Law • La.R.S. 15:1084 requires OJJ to use a formula to determine the rates for non-secure residential contracts. • Rates paid to contract providers ranged from $112.65 per day to $258.62 per day for similar services. • Recommendation: Establish a formula to establish rates for non-secure residential facilities as required by law.

45. No Financial Monitoring No financial monitoring conducted to ensure that contract providers operate within their budgets. No verification that invoiced amounts were spent on required services. Recommendation:Develop a risk based approach for monitoring whether contract providers are operating within their budgets.

46. Contract Monitoring:Monitoring Tools • OJJ’s monitoring tools did not address all contract requirements. • Some examples include: • Substance Abuse Treatments • Psychiatric Consultation • Behavior Management • Education Assessments

47. Contract Monitoring:Tracking Results • OJJ had no comprehensive system to track monitoring results. • OJJ did not record any results from its monthly monitoring visits As a result, OJJ could not track deficiencies of contract providers over time and ensure that sanctions were consistently imposed.

48. Contract Monitoring: Outcome Data • OJJ did not ensure outcome data collected from contract providers was complete. • All annual outcome reports submitted by contract providers for fiscal year 2013 were incomplete. • Contract providers failed to report over 50% of the required outcome measures. However,OJJ did not review the outcome measures that contract providers did submit.

49. Contract Monitoring:Outcome Data Not Reported

50. Contract Monitoring • Recommendations: • Ensure monitoring tools address all contract requirements. • Develop a system to track monitoring results and use this data to manage the overall monitoring process. • Monitor the annual outcome reports submitted from all providers and use this information to evaluate the quality and effectiveness of services provided.