Audit Faults Tracking of Medicaid Spending

The D.C. Department of Health failed to show how it spent $16.3 million last year to transport more than 8,000 Medicaid patients who used vans, taxis and buses to get to doctors' appointments, according to an audit by the city's inspector general.

Inspector General Charles J. Willoughby said the Medical Assistance Administration, the Health Department office responsible for monitoring Medicaid spending, did not have completed forms to document who was transported and whether the costs were legitimate.

The lack of records "is a serious breach of basic internal controls," Willoughby said.

The audit found that 8,607 Medicaid recipients filed 427,898 claims, and the city paid 225 providers to transport them for treatment. The average annual cost for each participant was $1,895, the report said. The Health Department had only 292 claim forms.

Because of the missing forms, the Health Department could not determine the number of participants authorized to use the program or whether their medical conditions required the transportation services, the inspector general said.

In addition, D.C. Council member David A. Catania (I-At Large), whose committee monitors the Health Department, said his office could not locate some transportation companies listed as receiving money in the program or validate that all of the residents involved qualified for the services.

"This is just unacceptable," Catania said. "There's absolutely fraud, and the way our Medicaid records are kept, we can't prove it."

Catania said he wants to hire a single transportation provider that would be responsible for maintaining records.

The non-emergency transportation program for eligible Medicaid recipients is paid for with 70 percent federal and 30 percent local funds. Under the program, medical professionals are supposed to fill out and maintain "medical necessity forms" that identify the patients and the type of transportation needed. But the audit said the city did not enforce submission of paperwork.

The inspector general looked at a sample of 32 Medicaid patients who used the transportation services during May and June 2005 and found that 385 claims were paid, although 106 did not have proper documentation. None of the six medical facilities that treated those patients had the mandatory forms, the auditors found.

Health Director Gregg A. Pane, in his response to the findings included in the audit, wrote that his office recognizes there are "profound management and financial challenges to overcome." He said he will implement the auditor's recommendations to establish a filing system and perform periodic reviews of the mandatory forms, and he will require medical professionals to submit the paperwork.

"We expect that the results of the . . . recommendations will be improved internal control, increased oversight and reporting and increased integrity and reliability of information," Pane said.

Catania questioned health officials about the transportation system at a committee meeting in March, before the audit was complete. Based on the responses, the head of the program was fired, he said.

"I asked, 'How do we know these are legitimate trips?' And the person in charge said, 'We take their word for it,' " Catania said. "We were running a multimillion-dollar honor system. We were spending more transporting the patients than paying the physicians."