A recent audit by the Louisiana Legislative Auditor makes recommendations, and has audit findings, that are inconsistent with the managed care model of health care.

The audit criticizes the Louisiana Department of Health for allowing payments above what is indicated on the fee schedule for some behavioral healthcare services. However, auditors fail to acknowledge this is an allowable and accepted practice used to ensure there are enough specialized providers in each health plan’s network.

In the Department’s response to the Legislative Auditor, Department Undersecretary Cindy Rives writes, “Beyond minimum standards, states allow MCOs to pay their providers higher than fee for service (or the minimum rate). With provider reimbursement being among the most critical factors contributing to provider participation in MCOs, this flexibility enables MCOs to maintain an adequate network, particularly in rural areas and for provider types in short supply.”

The audit criticizes the Department for paying providers more than what is indicated on the fee schedule for some behavioral health services. The Department objects to this characterization, with Rives responding, “(This practice is) consistent with federal law and the current contracts between (Medicaid) and the MCOs. Such payments are not considered overpayments.”

The Department believes that should the auditor’s recommendations be followed, the result would be “decreased access to care for the most vulnerable and hard-to-treat Louisiana residents.”

“Federal law allows the use of enhanced payments to ensure access to healthcare services. We believe this is a good way to ensure critical access to behavioral healthcare services and providers, especially in rural populations,” added Rives.

The audit also faults the Department for not making changes to its claims payment system that would prevent these enhanced payments.

Again, the Department objects to the finding, writing that although MCOs are required to provide all of the services listed on the Medicaid fee schedule, that schedule only defines the minimum payment and the minimum services.

In disagreeing with the findings in this report, the Department stands by its managed care organizations that use a market-based approach to reimbursing providers. This payment model ensures that Louisiana’s Medicaid enrollees have access to critical behavioral health care services.

Read the Department’s full response here.