State charged $239M for Medicaid overpayments

Much to the chagrin of health officials in Louisiana, the state owes $239.5 million for overpayments made by the Department of Health and Hospitals to charity hospitals run by the state to care for uninsured patients, according to the federal government. The money was distributed under the Disproportional Share Hospital (DSH) program from 1996 through 2007.

The news puts a significant dent in DHH's plans to pare back its $6.6 billion Medicaid budget. The organization maintains that the money it used for charity care had all been approved by CMS, according to The Advocate. However, the newspaper reports, DHH never adjusted its funding after the federal government reduced payments for uninsured care.

CMS said that in 1997, the state failed to "appropriately recoup DSH" money overpaid to nine state-run hospitals.

"We are, of course, disappointed by this decision from Washington," DHH Secretary Bruce Grenstein said, according to a news release. "The loss of nearly $240 a significant challenge even in good fiscal times, and particularly difficult as the federal government continues to put policies in place that further tie our hands and strain our ability to manage our Medicaid program."

Despite its insistence that it did no wrong, DHH already has $90 million carved out of this year's budget to repay the government, some of which likely came from withholding various payments to hospitals, according to Fred Cerise, vice president for LSU System.

Initially, CMS had ordered Louisiana to pay back $362 million for unapproved billing costs. DHH, however, was able to find $122.6 million in off-setting funds.

To learn more:
- here's the DHH press release
- read this article in The Advocate