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State Auditor Claire McCaskill Releases Medicaid Audit

October 03, 2005
By: Katie Peterson
State Capital Bureau

JEFFERSON CITY - Missouri State Auditor Claire McCaskill claimed that her office has found how nearly $5 million in the administration's cuts to the state's Medicaid budget could have been retained to recover the cost of items such as wheelchairs, oxygen devices, and prosthetics for medicare recipients.

McCaskill said the audit conducted from Jan. 1, 2003 - March 31, 2004 found that the state could save $5.4 million annually through competively bidding for the purchases of such medical items mentioned earlier referred to as Durable Medical Equipment.

"Competitive bidding is the best friend of the taxpayer in government services. It is a process by which you are sure you are getting the best value out of taxpayers' dollars," McCaskill said.

The state has not agreed to begin a bidding process for the equipment according to McCaskill.

Debra Scott, spokesperson for state's Social Services Department said that the state is looking at the competitive bidding process.

"That is a relatively new process. Only two states have competively bid for Durable Medical Equipment and did so under a waiver from the Federal Government," Scott said.

"Prior to those two demonstration sites it has been untested and new territory," Scott said.

McCaskill's audit reported that Missouri pays more than the average medical equipment rate paid by surrounding states 41 percent of the time.

The audit cited one example where a prosthetic device had a Missouri reimbursement rate of $2,440 while four out of the eight surrounding states had a rate of $1,830 for the same device.

In addition, McCaskill charged that the state does little to encourage a law that states that Missouri businesses should have preference if their service or product has the same quality and the same or lower prices. During the audit period, $4.8 million has been paid to non-Missouri providers for same items offered in Missouri.

"Every dollar we save in the purchase of medical equipment is potentially another person who can avail themselves a very needed help from the government for this kind of equipment," McCaskill said.

According to McCaskill, the Social Services Department agreed with the recommendation to start encouraging the law.

The audit also reviewed the state's transportation system of Medicaid recipients to non-emergency medical appointments.

McCaskill said auditors found that the previous Medicaid transportation contractor earned a $19 million gross profit less during a 15 month period.

McCaskill recommended the next contractor be better monitored to make certain that they are adequately documenting that all trips taken are actually for Medicaid purposes and that they are using the most cost-effective transportation.

But the governor's office charged Democrat McCaskill's findings were old news -- based on procedures during the prior adminstration of Democratic governor Bob Holden.

"She's working on very dated information," said the governor's top spokesman, Spence Jackson.

"We since canceled the contract that was costing us so much money that Bob Holden entered into."

The audit cited one example where the contractor charged the state for $98.44 in administrative services for a Medicaid recipient drove himself to an appointment for 15 cents a mile for a 24-mile round trip.

"There was an incentive by the previous contractor to overcharge the state of Missouri. That's not good business," McCaskill said.

Social Services Department Spokesperson Scott said the audit information was old news.

Scott said, "There is no surprises here. Under Gov. Blunt's administration we have been aggressively pursuing reform and change in the Medicaid system and Non-Emergency Medical Transportation and Durable Medical Equipment are two very important pieces of that."