1. Louisiana Legislative Auditor: A Closer Look at Three Recent Reports Melissa Barbato, Senior Performance Auditor Cassadara Johnson, Senior Performance Auditor David Leingang, Senior Data Analyst March 12, 2014

2. Special Supplemental Nutrition Program for Women, Infants and Children (WIC), Office of Public Health, Department of Health and Hospitals, November 2013 Medicaid Participant Fees Paid for Deceased Individuals, Department of Health and Hospitals, October 2013 Monitoring of Non-Secure Residential Contract Providers, Office of Juvenile Justice, January 2014

3. Special Supplemental Nutrition Program for Women, Infants and Children (WIC) Melissa Barbato, Senior Performance Auditor

4. Special Supplemental Nutrition Program for Women, Infants, and Children Federal U.S. Department of Agriculture program Louisiana’s $126 million program certified about 145,000 participants in FY12

5. Pregnant women, breastfeeding women, postpartum women, infants, children up to age 5 Must meet income requirements Must be a Louisiana resident Must have a nutrition-related problem

6. Nutrition education Healthy foods, such as: – Milk – Eggs – Whole grain bread – Fruits – Vegetables

7. Food instruments Redeemed at vendor locations

8. WIC vendors are authorized by OPH 723 vendors across Louisiana in FY12 Vendor types

9. OPH should strengthen its process for administering and monitoring vendors and clinics. We will discuss four of the nine findings today.

10. OPH assigns vendors to groups, or tiers Based on self-reported sales volume and location Rural/small sales volume vendors can generally charge more than large urban vendors

11. TierDescription 1 Urban Vendor & $200,000+ in sales 2 Rural Vendor & $30,000-$100,000 in sales 3 Rural Vendor & less than $30,000 in sales 4 Urban Vendor & less than $200,000 in sales 5 WIC Only Vendor 6 Above 50% Vendor 7 Rural Vendor & $100,000+ in sales Source: Prepared by legislative auditor’s staff using WIC redemption data, January-June 2013

12. Some vendors may have charged too much, while others may not have charged enough Overall, vendors may have overcharged the program an estimated $655,132 Assigned TierCorrect Tier# Vendors Potential Overcharge / Undercharge 1721-$31,407.35 3135$176,329.73 71144$381,225.29 Source: Prepared by legislative auditor’s staff using WIC redemption data, January-June 2013.

13. We recommended that OPH develop a review process to ensure it assigns vendors to the correct tier. OPH agreed.

14. Attempts to redeem food instruments over the maximum are rejected Vendors are required to submit monthly price reports OPH did not verify the accuracy of prices

15. VendorTotal WIC food items priced Total accurate prices Total inaccurate prices – too high Vendor #1443311 Vendor #21468 Vendor #320128 Total7851 (65%)27 (35%) Source: Prepared by legislative auditor’s staff using August 2013 price information.

16. We recommended that OPH modify its routine monitoring process to include verification of the vendor’s prices. OPH agreed.

17. “High risk” vendors have a high probability of program abuse Federal requirements FY12 discrepancy: 24 or 5 high risk vendors? No required FY12 activity documented for 2 of the 5 high risk vendors

18. Smaller vendors redeemed large numbers of transactions over time: – One vendor had over 38,000 paid transactions totaling approximately $873K in FY13

19. Vendors with high numbers of “even dollar” transactions: Vendor (Top Five) # Even Dollar Transactions Total Amount Vendor #11,311$32,944 Vendor #21,081$7,721 Vendor #3702$23,183 Vendor #4483$14,740 Vendor #5455$17,214 Total4,032$95,802 Source: Prepared by legislative auditor’s staff using redemption data and other OPH vendor data.

20. Vendors consistently redeemed at/near the maximum amount: % Maximum# VendorsAmount 95375$58,209.76 96315$56,214.95 97339$71,267.89 98290$66,729.82 99268$39,991.68 100206$48,471.25 Source: Prepared by legislative auditor’s staff using data from Solutran.

21. Vendors with high numbers of returned food instruments: Return Reason# VendorsAmount Stale Dated153$13,373.88 Early Cashing465$117,480.66 Altered427$138,758.51 Unreasonable Dollar Amount (Above Max for Food Instrument)611$724,155.81 Source: Prepared by legislative auditor’s staff using data from Solutran.

22. We recommended the following to OPH: – Correctly report number of high risk vendors – Investigate high risk vendors as required – Adopt analyses similar to those presented in the report and other analyses as identified OPH agreed.

23. Enforcement authority in several sources; however, these sources are inconsistent FY12 enforcement actions: – Disqualified one vendor – Issued no penalties – Did not track warning letters sent

24. Counting WIC food inventory during routine monitoring OPH sent 71 warning letters in the sample we reviewed However, there were 90 total stock violations in our sample

25. Nine documented instances with no follow up May/September 2013 observations Complaint regarding expired infant formula

26. Warning letter -> 90 day disqualification or penalty 6 of the 75 vendors in our sample had repeat violations but only received a warning letter Informal/nonspecific correction action plans accepted

27. Some of our recommendations to OPH included: – Ensure sanctions are consistent across sources – Address unsanitary conditions – Develop template for corrective action plans – Develop sufficient tracking system to detect patterns/improve effectiveness OPH agreed.

28. Medicaid Participant Fees Paid for Deceased Individuals David Leingang, Senior Data Analyst

29. Data Analytics Unit Project

30. Who – Subunit of Performance Audit What – Analyze Data When – November 2012 Where – State Agencies Why – Do more with less, Proactive How – ACL and Excel

31. Bayou Health and Louisiana Behavioral Health Partnership Eligibility Determination Per member per month fees

32. To determine if DHH paid Medicaid participant fees for deceased individuals in the Louisiana Behavioral Health Partnership and Bayou Health programs between February 1, 2012, and June 30, 2013.

33. DHH – Medicaid – All payments made between 2/1/2012 and 6/30/2013 DHH – Vital Records – Deceased data from 1991

34. Compared the deceased individuals from Vital Records to the Medicaid claims paid to determine if any payments were made for claims occurring after a participant’s death

38. DHH does not have a sufficient process in place for identifying deceased Medicaid participants in a timely manner According to DHH management, the department should be able to recover the payments identified in this report.

40. Office of Juvenile Justice (OJJ): Monitoring of Non-Secure Residential Contract Providers Cassadara Johnson, Senior Performance Auditor

41. Objective: To determine if OJJ has improved its monitoring of non-secure residential contract providers since our 2010 performance audit.

42. We followed up on 14 recommendations related to monitoring of contract providers. Status of OJJ Recommendations As of June 30, 2013 Recommendation Status Number of Recommendations Percentage Implemented858% Partially Implemented321% Did Not Implement321% Total14100% Source: Prepared by legislative auditor’s staff using information obtained from OJJ.

43. OJJ had 12 non-secure residential contracts totaling over $42.9 million. Contract terms are approximately two to four years, with the oldest contract beginning September 2011.

44. La.R.S. 15:1084 requires OJJ to use a formula to determine the rates for non-secure residential contracts. Rates paid to contract providers ranged from $112.65 per day to $258.62 per day for similar services. Recommendation: Establish a formula to establish rates for non-secure residential facilities as required by law.

45. No financial monitoring conducted to ensure that contract providers operate within their budgets. No verification that invoiced amounts were spent on required services. Recommendation: Develop a risk based approach for monitoring whether contract providers are operating within their budgets.

46. OJJ’s monitoring tools did not address all contract requirements. Some examples include: – Substance Abuse Treatments – Psychiatric Consultation – Behavior Management – Education Assessments

47. OJJ had no comprehensive system to track monitoring results. – OJJ did not record any results from its monthly monitoring visits As a result, OJJ could not track deficiencies of contract providers over time and ensure that sanctions were consistently imposed.

48. OJJ did not ensure outcome data collected from contract providers was complete. – All annual outcome reports submitted by contract providers for fiscal year 2013 were incomplete. – Contract providers failed to report over 50% of the required outcome measures. However, OJJ did not review the outcome measures that contract providers did submit.

49. Number of Outcome Measures Providers Failed to Report Fiscal Year 2013 Providers Number of Measures Providers Failed to Report (out of 24 Required Measures) % Boys Town of LA2396% AMI Kids2396% Community Receiving Home (Renaissance)2292% Rutherford House2188% Harmony Center- Harmony III Group Home1979% Harmony Center- Camelia Group Home1979% Johnny Robinson's Boys Home1979% Christian Acres Youth Center, Inc.1771% Educational & Treatment Council770% Allen's Consultation & Training1563% Boys and Girls Villages1563% Ware Youth Center655% Source: Prepared by legislative auditor's staff using provider annual reports.

50. Recommendations: – Ensure monitoring tools address all contract requirements. – Develop a system to track monitoring results and use this data to manage the overall monitoring process. – Monitor the annual outcome reports submitted from all providers and use this information to evaluate the quality and effectiveness of services provided.

51. OJJ entered into a two-year, $12 million contract with Magellan to manage 5 of the 12 non-secure residential contracts. OJJ had not developed a monitoring plan as required by this contract. Recommendations: – Develop a plan to monitor Magellan’s oversight of the 5 contracts – Require Magellan to report on its progress towards meeting the specific goals of the contract

52. Questions?

53. For these reports (and others), visit www.lla.la.gov