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Of whistleblowers, fraud and audits…

Don Berg, head of Idaho's legislative audits division, told the Legislative Council today that two of his staff members are now certified fraud examiners. But he said the best way to find fraud is through whistleblower protections and encouraging tips from state employees or citizens; many states have hotlines for that purpose. Under questioning from lawmakers, Berg said he worked with the state controller's office on a hotline plan several years ago, but then the state economy tanked and the project was abandoned for the moment. Said Berg, “The audit process is rarely the catalyst that identifies the fraud or the issue, although we're trying to be more proactive and alert to that.” He said when he opens the newspaper every day, “I hope that the front-page story isn't some grandiose fraud from some senior state official that I should have known about.”

Among the biggest challenges in the audit division now, he said, is the continuing issue with Molina, the Medicaid billing contractor with the state Department of Health & Welfare. Because the company's problems created big delays in payments to providers, it sent interim payments out to tide them over, but now, Berg said, “There's $120 million paid to Medicaid providers that they can't identify the client or the service.”

Rep. John Rusche, D-Lewiston, a retired physician and health insurance executive, said, “That $120 million of unidentified expenses makes it very difficult to do valid managed-care contracting, because you can't identify the services.” That'll be a problem, he warned, as this year's Medicaid reform bill, HB 260, requires moves toward managed care starting in the upcoming fiscal year.

Berg said the interim payments “sidestepped the entire process, so they're simply sending this chunk of money out to the providers and then doing this enormous reconciliation. … To connect the dots to the client - this is the thing that they're trying to work through.”


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Betsy Z. Russell covers Idaho news from The Spokesman-Review's bureau in Boise.

Named best state-based political blog in Idaho for 2013 by The Fix

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