Legislative Auditor clarifies ‘consultation’ on Medicaid audit

On Monday the Department of Human Services announced that it was seeking an independent audit of the state’s Medicaid rates from 2003 to 2011. In the letter announcing the probe, DHS Commissioner Lucinda Jesson stated that the request for proposals had been developed in “consultation” with the Office of the Legislative Auditor.

The inclusion of the Legislative Auditor’s office in developing the proposal was seemingly significant since it has scrutinized the transparency and accountability of the state’s $8-billion-per-year Medicaid program. But Legislative Auditor James Nobles issued a letter to Jesson and legislative leaders on Tuesday clarifying his limited role in the development of the proposal and questioning whether it can be effective. Nobles’ letter is worth quoting at length:

“Having learned by chance that DHS was planning to seek ‘outside audit services’ to review its rate setting process, I requested to see an RFP if one had been developed, and a draft RFP was sent to me several days later by the department’s legal counsel. After reviewing the draft, I sent the legal counsel the following e-mail message:

“A couple of OLA staff (involved with managed care issues) and I reviewed the RFP. We all have the same impression; the RFP proposes a very ambitious scope and set of objective to be accomplished in a very short — unrealistic — timeframe. It is hard to see how the work you expect can be accomplished well within a 30-day period.

“In a brief follow-up telephone conversation with the legal counsel, I expressed concern that the timeframe was also unrealistic because it was being delineated by dates arbitrarily set by the department, rather than staffing availability at the most qualified actuarial firm. In sum, timeframe concerns were the full extent of my ‘consultation’ with the department about the RFP. I was never asked for, nor did I offer, any consultation relative to the scope, methods, or purpose of the actuarial review.”