Louisiana pays DOJ $13M for scheme to get higher federal Medicaid payments

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Louisiana agreed to pay the Department of Justice $13.4 million to resolve allegations the state submitted false and inflated Medicaid claims. (Getty Images/Belyay)

Louisiana agreed to pay the federal government $13.4 million to resolve allegations the state submitted false and inflated Medicaid claims to get more federal dollars.

The settlement with the Department of Justice announced on Wednesday comes as the Centers for Medicare & Medicaid Services is taking steps to crack down on illicit state efforts to get more federal money for Medicaid.

“Today’s settlement demonstrates that we will take whatever steps are appropriate in our effort to protect federal healthcare programs including Medicaid, from false claims,” said Assistant Attorney General Jody Hunt from DOJ’s Civil Division in a release.

Medicaid is a federal-state partnership in which the federal government agrees to cover a certain percentage of Medicaid services and the states cover the rest.

Nursing homes and hospice facilities would typically submit claims to Louisiana first. The state would pay those claims and then get reimbursement from CMS.

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The settlement centers on Louisiana’s efforts to send inflated Medicaid claims in December 2010, March 2011 and June 2011, according to DOJ. The agency alleged that Louisiana’s Department of Health knew that the federal share for Medicaid payments would decline in those months.

So Louisiana “fraudulently caused its healthcare contractor, Molina Medical Solutions, to prepare, submit and pay claims for nursing homes and hospice services in these months, before the providers had submitted to Louisiana any claims for them,” the agency said in the release.

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Louisiana would then claim the federal reimbursement for the premature payments and avoid getting reimbursed at the lower rate, DOJ added.

The state said that the situation in question occurred under a previous governor. 

"The settlement is a reasonable conclusion to the matter that began eight years ago," the state said. "The agreement recognizes that the action taken by the state at the time to address a budget shortfall now requires the [state] to return $13 million to the federal government."

The settlement comes as CMS earlier this week put out a proposed rule aimed at cracking down on state schemes to get a higher federal match. The proposed rule would enable the agency to better monitor state expenditures such as supplemental payments above the base rate for Medicaid.