Mississippi Medicaid Madness
The paychecks of the American people simply are not going as far as they used to go. Record levels of government spending precipitated historic inflation rates. The value of the dollar is falling and hard-working men and women across the country are feeling the economic pain. Lawmakers in Washington, DC and in every state across the country ought to be working to be more efficient with taxpayer dollars to minimize this pain. Unfortunately, recent developments in states like Mississippi are showing this not to be the case.
The state of Mississippi recently awarded state Medicaid management contracts to three separate entities, a number of which have proven record of waste, fraud, and abuse. Given that the budget for these contracts is $6.2 billion, a lot is clearly at stake in the success of the organizations in question. This success is especially important, given the fact that almost 750,000 Mississippi residents are enrolled in either Medicaid or the Children’s Health Insurance Program (CHIP).
One such recipient is the Magnolia Health Plan, the Mississippi-based subsidiary of healthcare giant, Centene Corporation. Coincidentally, Centene was investigated last year by Mississippi for overcharging the state’s taxpayers for pharmacy benefits. After Mississippi investigated whether or not Centene had inflated estimates to the state’s Division of Medicaid, they reached a $55.5 million settlement for the alleged wrongdoing.
It is this company that was just fined tens of millions of dollars for fraudulently ripping off Mississippi taxpayers that is now in charge of healthcare for roughly one-quarter of the state’s residents. This is also far from an isolated incident. The complaint from Mississippi is similar to complaints filed in both Ohio and Nevada for the same issue. Centene’s state-level subsidiaries are routinely overbilling for care, costing taxpayers millions – if not billions of dollars.
Part of the reason such a decision was allowed to happen is because Mississippi uses a severely flawed blind system of procurement to award billions of dollars in contracts every year. Each year, there are routine violations of the “blind” nature of the process, where powerful bidders – like Centene – are allowed to signal which bids are theirs, putting their thumbs on the scale.
The state has already paid well over $100,000 (taxpayer funds) in fines for blatant violations of the blind scoring system. Of all the fines Mississippi has had to pay for violating best practices in any area of government, roughly 83 percent of those costs were associated with violating the blind procurement rules. It is abundantly clear that the existing process is flawed – if not outright corrupted – and should be reformed or abandoned before any further damage is done.
While Centene was settling for overcharging taxpayers, they were using their expansive resources to shower politicians with millions in political donations. In Nevada, Centene subsidiaries – including those not located in the state – funneled a number of separate donations to Governor Steve Sisolak. It’s important to note that Sisolak is one of three voting members on the Nevada Board of Examiners, which gives final approval on such contracts.
Another contract winner is TrueCare, which is owned by the state hospitals. Giving TrueCare the ability to manage billions in state healthcare dollars has been likened to handing the kids the candy jar – and rightly so. Hospitals are now the largest source of all healthcare spending. In the last three decades, the prices hospitals charge have risen 600 percent, well higher than the inflation rate over that same time period. Data has shown that hospital overcharging has been an issue for years.
Very simply, there is too much at stake to make these types of mistakes with Mississippi’s healthcare system. Billions of taxpayer dollars and the healthcare of nearly a million residents are on the line. Given the economic turbulence the entire country has faced, state lawmakers in each of the 50 states need to be more efficient with taxpayer dollars.
Emboldening organizations that overcharge struggling families to enrich themselves and defraud taxpayers is the exact opposite of a solution. Mississippi is a great example of a state that needs to reform its process for the sake of its own good governance and for those that desperately need the relief.
Dan Savickas is the director of tech policy at the Taxpayers Protection Alliance.
