Louisiana to Pay $13.4M to Settle Allegations of Inflated Medicaid Claims for Nursing Home Care

In a twist on typical allegations of Medicaid overpayments, the state of Louisiana will be paying back millions to the federal government.

The Louisiana Department of Health (DOH) agreed to pay $13.42 million to settle allegations that it submitted inflated claims for long-term nursing home and hospice care, the federal Department of Justice (DOJ) announced on November 13.

In exchange for the settlement, the government will no longer work to gather additional damages from the state, which would have brought the total from $13 million to $39 million.

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Medicaid is a joint federal and state program, with the federal government disbursing quarterly grant awards that cover a certain portion of a given state’s costs for health care services under Medicaid. That federal share is set by a percentage rate.

In Louisiana, nursing homes and hospices would generally submit claims to the state on the tenth day of the month after the month in which the services were provided. Louisiana would then pay the claims, seek federal reimbursement for those costs, and receive the federal reimbursement based on the rate in place at that time.

According to the allegations, the Louisiana DOH was aware that the rates for the federal share of the state’s Medicaid payments would decrease after the months of December 2010, March 2011, June 2011, and September 2013. In order to get the higher federal share percentage rates in effect during each of those months, the DOH allegedly led Molina Medical Solutions, its health care contractor, to prepare, submit and pay for claims for nursing home and hospices services during those months — before the providers in the state had submitted any claims.

Allegedly, the state then claimed federal reimbursement for the premature payments, leading the DOH to receive a federal share based on the higher percentage that was in effect during December 2010, March 2011, June 2011, and September 2013, instead of the lower rate that was in effect in the subsequent months when providers submitted their claims to Louisiana.

As is common in settlements surrounding federal accusations of Medicare and Medicaid fraud, the DOJ’s claims remain allegations only, and there was no determination of liability.

The Louisiana DOH, for its part, noted that the issues involved in the case happened under the leadership of former governor Bobby Jindal, a two-term Republican who left office in 2016.

“The repayment the Louisiana Department of Health negotiated with the Centers for Medicare and Medicaid Services is for money spent during the Jindal administration that goes back to 2010,” the DOH said in a statement provided to SNN. “The $13 million settlement, which was negotiated by current Department of Health leadership, is significantly less than the nearly $39 million the federal government was seeking.”

While the feds typically go after health care operators for fraud cases, officials involved in the Louisiana action emphasized that the law still applies to state agencies as well.

“This office will remain vigilant in its efforts to ensure the integrity of the Medicaid program by continuing to pursue those who commit improprieties against the program — whether they be providers or beneficiaries, or those more central to the administration of the program,” U.S. attorney Brandon Fremin said in a statement announcing the settlement. “The people of Louisiana deserve it.”

The Civil Division of the Department of Justice, the U.S. Attorney’s Office for the Middle District of Louisiana, and the U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) conducted the investigation.