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Corbett to seek savings from Pa. Medicaid errors

| Wednesday, Nov. 10, 2010

HARRISBURG -- Over the next two months, Republican Gov.-elect Tom Corbett will examine potential savings in the state's Medicaid program identified in an audit by Democratic Auditor General Jack Wagner, a Corbett spokesman said Tuesday.

"One thing he's consistently said is, 'We can find savings in the current budget,' " said Kevin Harley, Corbett's campaign press secretary. "And one of the key areas to look at is the Department of Public Welfare."

Corbett takes office Jan. 18.

With the state facing a deficit of as much as $5 billion next year, Wagner touted the audit his office conducted more than a year ago, because of new figures he obtained. With final numbers from county assistance offices, Wagner said the error rate in Medicaid is 15.5 percent. He previously pegged it at 14 percent.

Even a 10 percent correction would yield $436 million for the 2011-budget and $1.9 billion over four years, Wagner said.

The errors essentially are overpayments to managed care companies after people leave the Medicaid program, Wagner said.

"(The Welfare Department) must stop this money from going out to insurance companies for thousands of people who are no longer eligible for this program," Wagner said. "We can save hundreds of millions of dollars without cutting benefits, simply by preventing improper payments."

Mike Race, spokesman for the Welfare Department, said it has implemented some of Wagner's recommendations, including changes to tighten verification procedures.

And there were errors in Wagner's audit of the error rate, Race said.

The agency "found cases where the AG audits findings of 'errors' were, in themselves, erroneous," Race said. "In about one in 10 of the cases his office cited last year as having errors, we found the AG had mistakenly interpreted one or more Medical Assistance eligibility criteria."

An estimated 2.1 million elderly and low-income Pennsylvanians rely on Medicaid for health insurance.

"It is a vital program, and it is also a poorly run program because of DPW's steadfast refusal to manage it properly," Wagner said.

Harley said Corbett would "take a look at some other audits collecting dust in this administration, to see where we can save money."

Race claimed Wagner "seems to incorrectly equate a 10 percent error rate with a 10 percent cost reduction, ignoring the fact some of the supposed errors would generate no savings if corrected."

For instance, Race said, some of the errors he cited in past audits involved applicants for Medical Assistance being assigned to an incorrect category of care. Such clerical errors, once corrected, don't generate any savings, Race added.

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