Auditor General Jack Wagner Renews Call for DPW to Tighten its Oversight of Medicaid Eligibility

Friday, January 29, 2010 Health Insurance News
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HARRISBURG, Pa., Jan. 28 Auditor General Jack Wagner today renewed his call for the Department of Public Welfare to tighten its oversight of Medicaid eligibility reviews.

In a series of reports issued beginning December 2007, Wagner said his department found widespread errors in the state's Medicaid program that are costing Pennsylvania taxpayers millions of dollars each year.

Wagner's auditors found that DPW, through its county assistance offices, failed to make proper Medicaid eligibility determinations on more than 1,900 randomly selected Medicaid applicants between January 2005 and January 2009, resulting in $3.5 million in improper payments made on behalf of ineligible recipients.

Auditors found errors in 1,951, or 14.7 percent, of 13,225 Medicaid cases selected randomly from 567,984 Medicaid cases from 90 county assistance offices in 64 counties. DPW has asserted that the error rate is only 4%, but eliminating just 4% of those errors would save Pennsylvania taxpayers $320 million per year, Wagner said.

Wagner, in testimony today before the House Insurance Committee, said the Department of Public Welfare must take immediate steps to tighten its administration and oversight of the Medicaid program to ensure that people who are eligible for Medicaid benefits will be able to receive every dollar they're entitled to for their care.

"Every dollar that is wasted is one that could have gone to help a truly needy person receive the medical assistance he or she deserves," Wagner said. "With the commonwealth facing widening budget deficits, DPW must do all that it can to monitor the state's Medicaid program, to make sure all funds are being spent efficiently, effectively, and for their intended purpose."

Wagner's audits determined that many of the improper eligibility determinations were due to DPW's failure to perform semi-annual reviews and annual renewals when they were due. The improper eligibility determinations occurred because recipients' increases in income placed them above the eligibility limits. Information that would have deemed the recipient ineligible was not reviewed in a timely manner, and benefits continued to be paid, Wagner said.

The audits made several recommendations to DPW to correct the identified deficiencies, including changing its policy of reviewing increases in income only at six- and 12-month intervals, and improving monitoring to ensure compliance with established internal controls. The sooner DPW detects increases in income from ongoing employment, the sooner the recipient can be deemed ineligible and the improper payments can be stopped, Wagner said.

Wagner said DPW indicated it has changed its policy of reviewing increases in income when the information becomes available, and our auditors will look to verify this in our future follow-up audits.

Auditor General Jack Wagner is responsible for ensuring that all state money is spent legally and properly. He is the Commonwealth's elected independent fiscal watchdog, conducting financial audits, performance audits and special investigations. The Department of the Auditor General conducts more than 5,000 audits per year. To learn more about the Department of the Auditor General, taxpayers are encouraged to visit the department's Web site at

SOURCE Pennsylvania Department of the Auditor General

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