Editorial: Keep a sharp focus on Medicaid integrity

When something valued breaks, the tools used to fix it become more important.

Illinois’ financial picture has been broken a long time, and, to their credit, elected officials this year finally aligned their wills enough to forge crucial new tools for Medicaid reform. Last week, Gov. Pat Quinn signed the historic legislation, which includes $1.6 billion in spending cuts, a cigarette-tax increase and an end to the state pushing bills to the next fiscal year.

The new law also takes a sharper aim at fraud and abuse. That is where the work continues, and it’s an area where state leaders must keep their focus. Medicaid fraud comes in all shapes and sizes, but the latest reforms zero in on the collection of benefits by those not eligible.

The difficult process of finding these recipients was eased in February when the Department of Healthcare and Family Services was permitted to use electronic data to verify eligibility, a method the federal government had forbidden in the past. Still, officials found the work labor intensive, and successfully lobbied for the law to permit hiring outside vendors.

More of a concern is how the state will hire those vendors. It apparently intends to employ another new provision of the law allowing officials to skirt the normal bidding process in the interest of time. Every month the system goes without being monitored, officials say, the state is losing money, so it’s better to have state agencies pick a contractor within three months than wait on a bidding process that could take up to a year.

Well, maybe. But we’re skeptical. The standard bidding process exists for a reason and nowhere has the need for carefully managed awarding of contracts been more pronounced than in Illinois. We ought not leave open any chance for tax payers to be stiffed just because of the state’s desperation.

Consider this object lesson: A recent U.S. Government Accountability Office report found that a federal audit program by private contractors has cost taxpayers about $102 million since 2008 while identifying less than $20 million in Medicaid overpayments. The use of incomplete data for the audits was to blame. Both in terms of reputation and bottom line, Illinois cannot afford an outcome like that.

It’s difficult to determine what percent of Medicaid expenses classify as fraud and even harder to know how much fraud is due to ineligibility. The Justice Department says fraud costs taxpayers $60 billion a year nationwide. Other estimates put fraudulent claims as high as 10 percent. Whatever the figure, with Medicaid being one of the state’s largest expenditures, surely a great deal of money is involved.

A worker is as good as his tools, and Illinois has new tools to expose people who take advantage of the system. Leaders must use them well — while being careful not to abandon old ones that also may be valuable and necessary.