Report: WV could lose millions in Medicaid money

West Virginia could lose roughly $230 million in federal Medicaid funding if it doesn’t stop sending payments to health care providers facing “credible” accusations of fraud, according to a new report provided to lawmakers Tuesday.

The state Bureau for Medical Services sent that much money between March 2011 and June 2013 to providers accused of several different types of fraud, in violation of the Affordable Care Act, said Brandon Burton, an analyst with the office of the West Virginia Legislative Auditor.

“It is hopeful that the state will not be penalized financially (for actions the legislative auditor) determines is out of compliance with federal regulations,” Burton told a joint legislative committee Tuesday.

The data is an update to a previous report released by the legislative auditor in October 2013. The report said the state is ignoring a provision of the Affordable Care Act, also known as Obamacare, that requires suspending payments to Medicaid providers after the state determines an allegation of fraud is credible.

If the state continues to pay those providers after they’ve referred cases to the Medicaid Fraud Unit, it could stand to lose a significant amount of federal funding, according to the legislative auditor’s report.

The bureau, operating under the state Department of Health and Human Resources, disputed the auditor’s initial claims. The bureau doesn’t interpret the applicable portion of the Affordable Care Act the same way, said Alva Page, attorney for the bureau.

“There are times when Medicaid doesn’t have enough information to suspend a payment to the provider,” Page told lawmakers.

“It just seems fundamentally unfair to that provider.”

The legislative auditor’s office recently received information from the bureau about the amount of money it’s paid to the 65 providers with fraud referrals included in the 2013 report.

The report includes two types of referrals to the Medicaid Fraud Control Unit: a provider referral and a caseworker referral. The provider referrals include individual practitioners or hospitals, while caseworker referrals cover actual employees at those institutions.

During the audited time frame, providers themselves and providers with caseworkers facing credible fraud accusations received $17.9 million and $211 million, respectively.

“Therefore ... if federally audited because of a lack of adherence to the federal mandate, the state’s Medicaid agency could be at risk of losing its (federal funding) from $17.9 million to $211 million,” states a report from the legislative auditor’s office.

Since the release of the report, the legislative auditor said the bureau argued it had received a “verbal statement” from the federal government that said they were not issuing payments inappropriately.

After the legislative auditor requested proof of any federal approval, the bureau said it had received a written document recently but “it cannot discuss the contents of the correspondence with anyone,” according to the auditor’s office.

Page repeated the statements to lawmakers. He said the document the bureau received had a disclaimer at the bottom that said the information could not be made public because it’s a draft.

Questioned by lawmakers, Page didn’t immediately know what law the bureau would break by releasing the information. He said he would speak with the federal Medicaid official to get guidance on releasing the information.

Contact writer Dave Boucher at 304-348-4843 or Follow him at

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