State Auditor: Claim of $120 Million in Savings on Medicaid Cannot Be Verified

By Beth Musgrave, The Lexington Herald-Leader, Ky.

Dec. 17–The restructuring of the state’s Medicaid program was supposed to save Kentucky millions of dollars, but a new report by Kentucky State Auditor Crit Luallen questions whether retooling the state’s health-care program has led to real cost savings.

In a report released Monday, Luallen said savings of $120 million touted by former Gov. Ernie Fletcher could “not be substantiated because of inconsistent and confusing reporting practices.”

Luallen applauded the Department of Medicaid Services for trying to control the growth in spending for the program for poor and disabled Kentuckians, but she said, “this audit, coupled with recently disclosed $389 million Medicaid shortfall in the current year, underscores the need for transparency in Medicaid reporting.”

In 2007, the health-care program covered 711,000 people at a cost of $4.6 billion. When changes were made in the Medicaid program in 2006, officials said there would be savings of $120 million to $130 million a year and $1 billion over seven years.

But that information could not be substantiated, Luallen said

Medicaid submits reports to the legislature, but those reports are based on estimated savings, not budget amounts, the audit says.

There also is no means in the current reporting system for legislators to know whether the Medicaid program is working and whether some of the changes in the program are on target or working.

Luallen said that without accurate information, state legislators will not be able to make informed decisions regarding a health care system that is used by 17 percent of Kentucky and costs almost $5 billion a year to operate.

—–

To see more of the Lexington Herald-Leader, or to subscribe to the newspaper, go to http://www.kentucky.com.

Copyright (c) 2007, The Lexington Herald-Leader, Ky.

Distributed by McClatchy-Tribune Information Services.

For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.