Office of Medicaid Inspector General reports $1.56 million in recovered funds


LITTLE ROCK — Arkansas’ new Office of the Medicaid Inspector General recovered $1.56 million in improperly paid Medicaid funds in its first year, officials with the office said Monday.

The office’s budget for the fiscal year that ended June 30 was $2.55 million, counting both state and federal funds, or nearly $1 million more than amount of Medicaid money recovered.

Officials with the inspector general’s office say they are happy with the office’s accomplishments in its first year and say a simple comparison of money spent to money recovered does not tell the whole story. Critics question whether the benefits of creating the office justify the expense.

The office was created under Act 1499 of 2013, which tasks the office with preventing, detecting and investigating fraud, waste and abuse in the state Medicaid program and recovering improperly paid funds.

To create the office’s staff, 31 positions were transferred from the state Department of Human Services’ Program Integrity Unit and four new positions were created: the inspector general, a chief counsel and two new Medicaid fraud investigators. During this year’s fiscal session, lawmakers passed legislation that added another position that has not yet been filled: business operations manager.

Gov. Mike Beebe appointed Jay Shue, who had been serving as director of the Medicaid Fraud Control Unit at the state attorney general’s office, as the inspector general at an annual salary of $145,000. The job of chief counsel went to Bart Dickinson, who makes $112,000 a year; the two new inspector positions have not been filled.

As of Monday, 27 positions at the inspector general’s office were filled, according to spokeswoman Margaret O’Connell.

O’Connell said collections by the office in fiscal 2014 were 37 percent higher than collections in the previous year by DHS. Also in the past year, fraud referrals to the attorney general’s office more than doubled; the inspector general’s office created a website that provides an online form the public can use to report suspected fraud; and the office established a protocol for self-reporting by providers, she said.

Dickinson said 14 Medicaid providers reported possible improper payments in fiscal 2014, up from seven in the previous year. Four have already self-reported in July, he said.

He noted that the federal government provided $1.42 million of the agency’s budget, so the state’s share was $1.13 million. The federal Center for Medicaid and Medicare Services mandates that states have a Medicaid integrity program.

Dickinson also said the amount of money recovered does not take into account one aspect of the office’s mission: prevention.

“If you’re out there and you’re auditing, you’re educating providers and you’re recouping Medicaid money, and a provider no longer bills improperly, then there’s a cost avoidance,” he said.

Shue said Monday, “We feel like we’ve more than justified ourselves.”

Taking the responsibility of investigating Medicaid waste and fraud from DHS and putting it with a new agency has resulted in increased flexibility, autonomy and focus, he said.

“We focus exclusively on these issues,” he said.

State Sen. David Sanders, R-Little Rock, who sponsored Act 1499, said in a statement Monday, “The Office of Medicaid Inspector General is essential to ensuring the integrity and proper function of Arkansas’ Medicaid program. It is clear that we have bolstered Arkansas’ ability to combat waste, fraud, abuse and neglect in this important program.”

Rep. James McLean, D-Batesville, who voted against Act 1499, said Monday he still questions whether the office has justified its existence.

“That has to be the formula that you apply to this particular situation: Are we getting our money’s worth, in light of some pretty hefty salaries?” he said.