Amid looming cuts to federal program, Guam OPA raises red flags over $241M Medicaid disbursements

Inactive providers continued to receive payments

 By Mar-Vic Cagurangan

The Office of Public Accountability has flagged $241.1 million in dubious Medicaid payments made by the Guam Department of Public Health and

Social Services to questionable health care providers, including inactive or ineligible facilities and physicians with expired medical licenses.

The questioned costs accounted for over 60 percent of the department’s $399.6

million Medicaid disbursements for fiscal years 2020 through 2022. The OPA sampled 28 of the 218 on-island and off-island Medicaid providers.

“We questioned $241.1 million in Medicaid provider payments primarily due to noncompliance with local and federal regulations in regards to revalidations of providers’ enrollments once every five years, in which the providers’ eligibilities were already outdated and could be potentially no longer valid,” OPA said.

OPA found 12 Medicaid providers that have not been revalidated for eight to 10 years, throwing into question some $233.8 million in payments they received during the period covered by the audit.

Benjamin Cruz

 “The lack of revalidations once every five years could lead to a potential inclusion of unqualified or fraudulent providers,” states the audit report released today amid President Donald Trump's endorsement of a Republican plan to gut the federal health insurance program.

A House Republican budget resolution is seeking at least $880 billion worth of spending cuts expected to be extracted from Medicaid.

The program, which provides health insurance for low-income Americans, is partially funded and primarily managed by local governments.

The U.S. Congress raised the federal matching assistance percentage rate for Guam from 55 percent in 2011 to 83 percent in 2021. Any federal cuts would transfer the corresponding costs to Guam through a larger local funding match. A total of 33,537 Guamanians relied on the program as of June 2021.

“Our review of documents and information provided by the DPHSS–Bureau of Health Care Financing Administration relative to 28 (or 13 percent) out of 218 total Medicaid providers revealed several issues and deficiencies,” the OPA said.

The audit report cited outdated information, such as expired licenses, missing eligibility documents, and unorganized filing records jumbled with unrelated documents.

“Overall, this state of recordkeeping and storage could stem from inadequate staffing, staff and supervisor turnovers, ineffective orientation on efficient filing system, or lack of standard operating procedures relative to document filing and storage,” the OPA said.

An audit of sampled Medicaid providers from the department's list found that inactive Medicaid providers continued to receive payments and active physicians have expired licenses or certificates.

At least two providers, marked by DPHSS as “non-participating,"  received $85,000 in Medicaid payments for FY 2020-2022 despite their ineligibility to participate in Medicaid.

The OPA’s scrutiny of records also revealed that some Medicaid providers or affiliated physicians delivering services lacked medical licenses and Drug Enforcement Administration licenses, had no documented renewals on file and were not listed in the Providers Application and Agreement.

“Without medical licenses or DEA licenses, a Medicaid provider or physician could not be authorized to perform medical services, and are ineligible to receive Medicaid payments,” the OPA said.

The audit also found deficiencies in the Providers Application and Agreements that “may potentially allow DPHSS to approve and pay claims from ineligible provider physicians who may not be authorized to perform the services claimed.”

“These findings need management’s attention and corrective action to inspire the public’s confidence in the administrator’s decisions to achieve program objectives and uphold its integrity, Public Auditor Benjamin J. Cruz said.

“We made nine recommendations and DPHSS management has promptly provided us with their action plans to implement these recommendations," he added.

Sen. Sabrina Matanane suspected that what the OPA uncovered could be just the tip of the iceberg, noting that the audit represented only a sample of 28 providers.

“I am convinced that a larger sample would have highlighted even more questionable costs,” said Matanane, chair of the health committee.

While the OPA report may not point to "intentional fraud," Matanane said the audit exposed systemic problems in DPHSS' records management.

Sabrina Matanane

"Whether these questionable payments stem from fraudulent activity or are the result of mismanagement and poor record-keeping, my primary concern is that this could jeopardize future Medicaid funding and other federal dollars," Matanane said.

"At a time when our president is committed to cutting costs and reducing waste and abuse, we cannot continue to operate this way. In the coming weeks, an informational briefing with DPHSS will be held to discuss the audit, discuss their corrective plan, and address other critical public health issues," she added.

The report released today was the first of the OPA’s three-part performance

 audit series on the DPHSS Medicaid Program.

“The objectives of Part I of this audit are focused on assessing the accuracy of the Medicaid provider database; selection approval and revalidation processes and procedures; and compliance with licenses and other

documentation requirements by local and federal laws and regulations,” OPA said.

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