Saturday, February 21, 2004

From the February 20th "Thinking Right" by Jim Wooten in the Atlanta Journal-Constitution

Congress absolutely should stop states from gaming the Medicaid program. Georgia has paid $110.5 million to a small Minnesota company, Copeland Glenn, over the last five years to get federal Medicaid money. A fee of $110.5 million! To exploit loopholes in federal programs. Scandalous. This is why federal money should come to states in block grants. States should manage money, not rip off federal taxpayers.

And when it rains it pours...

The state of Georgia may have to repay $50 million obtained through a Medicaid financing scheme that has not been approved by the federal government. Georgia's financing plan, which collects a nursing home "bed tax," went into effect in July, but recently the state was told it did not meet federal requirements.

The state said it violated federal policy by collecting matching federal money on the nursing home fee before it got the required approval. But the violation was unintentional, state officials said.

Apparently the nursing homes would pay a fee per patient which would be counted as a state "contribution" and would then result in an increase of the federal contribution toward Medicaid. Currently Georgia gets $1.67 of federal funds for each $1 of state contribution, quite a return on the nursing home's "investment".

So we have a program that had to cut of $148 million last year, and possibly run out of money in a few months, but has paid $110 million to this consulting firm, over the past five years. And my be on hook to the federal government for an additional $50 million.

Apparently the feds have had their eye on Copeland Glenn for awhile:

The federal agency that oversees Medicaid is reviewing the Georgia contract that will pay a consulting firm $107 million for finding federal dollars for state programs.

The federal Centers for Medicare & Medicaid Services "is asking very general questions about the procurement process and the terms of the contract," said Julie Kerlin, spokeswoman for the state Department of Community Health, which runs the state Medicaid program....

And apparently there were some irregularities concerning the bidding process...

A Journal-Constitution investigation last month reported that Copeland Glenn's fee was negotiated by aides to Barnes while he was governor. The fee evaluation process failed to follow the terms of the bid request, thus violating state policy. The percentage fee that Barnes' office established for the major piece of Copeland Glenn's Medicaid work was nearly 5 percentage points higher than the firm bid for that work.

A former law partner of Barnes', Michael Jablonski, said he advised the firm and helped incorporate it in Georgia. Barnes has said he did not discuss the matter with Jablonski.

The amount paid was set as a percentage of federal funds recovered, in this case about 12.9% percent of roughly 3 billion dollars. But such consulting contracts are beginning to come under federal scrutiny:

Iowa Sen. Charles Grassley cited a Georgia contract as one of two examples leading him to request the review of such Medicaid consulting deals

I think that the revenue streams that these efforts generated are going to be harder to come by.
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