A bill to rein in Medicaid fraud could push out eligible Louisianans, critics warn

Yahoo

27-05-2025

A bill aimed at strengthening oversight of Louisiana's Medicaid program unanimously passed the state's senate Tuesday.
Senate Bill 130, sponsored by Sen. Heather Cloud, R-Turkey Creek, seeks to implement a series of data-driven checks and technological tools to ensure that only eligible residents receive Medicaid benefits.
The bill requires the Louisiana Department of Health (LDH) to conduct regular cross-checks with state and federal agencies, including the Department of Revenue and Social Security Administration. LDH must also review death records monthly, verify incarceration status quarterly and independently determine eligibility.
It also limits automatic (ex parte) renewals unless required by federal law, with a phase-out of current waivers by January 2026.
The bill is part of a broader effort to curb waste and fraud in the program, which provides health coverage to more than 1.8 million low-income Louisianans. But critics of the bill warn that the proposed changes could create administrative hurdles for eligible individuals and lead to disenrollment of vulnerable residents due to paperwork errors or data discrepancies.
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'We know that any time that there is any additional step for verification, it's an opportunity for someone to lose coverage,' said Courtney Foster, senior policy advisor for Medicaid at Invest in Louisiana, a nonpartisan policy research organization. 'A lot of what this bill says will be savings is for people getting kicked off of Medicaid.'
That doesn't necessarily mean that all of those people that are getting kicked off are ineligible, Foster said. It could just mean that they didn't respond to official correspondence. Sen. Gerald Boudreaux, D-Lafayette, brought up these concerns on the senate floor.
'If for whatever reason I don't answer the first time, or I think it's junk mail, it gets thrown out,' Boudreaux said. 'How do we have comfort knowing that on the certification process, that we're going to go above and beyond before we drop people off of the Medicaid rolls?'
Cloud responded saying the bill doesn't change the current process for removing people from Medicaid if they don't meet eligibility requirements.
The removal process, as she explained it, starts when LDH identifies a possible issue with a person's Medicaid eligibility — such as needing to verify income or address — they begin by sending a letter requesting more information. This initial letter follows federal guidelines and allows five days for delivery.
After that, LDH gives the person an additional 15 days to respond. During this combined 20-day window, the department also tries to contact them through other means, including phone calls, emails and text messages, to make sure they know what's needed to keep their coverage.
If there's still no response after 20 days, LDH sends an official 'advance notice of termination' letting the person know their Medicaid coverage will end. This notice must be sent at least 15 days before the termination takes effect. Because Medicaid coverage usually ends at the end of a month, this timing can sometimes give people a bit of extra time — potentially another full month of coverage — before they're removed from the rolls.
Cloud added that even after someone is dropped from Medicaid, they have another 90 days to provide the needed information and get their coverage reinstated retroactively.
'So theoretically, they have up to 125 days after the first [letter] was sent out to get their coverage reinstated if they are terminated,' Cloud said. 'It would be as if they'd never lost coverage. So that gave me a lot of comfort.'
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The fiscal note says reducing enrollment of ineligible recipients could save $74.9 million by 2026 and $941.5 million over five years, including state and federal dollars. The methodology for this savings includes the state assuming a majority of applicants won't respond to requests for more information, and only a fraction will attempt to re-enroll.
Foster said most of the savings would come from procedural denials, not necessarily policy improvements. And the cost-savings associated with the bill are 'questionable,' she said, because most of the time, when someone loses Medicaid coverage, they don't realize it until the next time they go to the doctor or emergency room. That could mean people who are disenrolled from Medicaid for procedural reasons, but do qualify for coverage, may simply get back on Medicaid.
'A lot of people who will be kicked off are likely eligible and may roll back on within a couple of months,' Foster said.
Implementing the bill would also cost money, including operating expenses of $139,297 for printing and postage, $4.5 million for professional services, like system modifications and subscription services, and $104,050 for equipment, like computers and phones.
It also calls for creating 50 new positions with salaries and benefits, which Foster said adds additional layers of bureaucracy dedicated to 'kicking people off of Medicaid.'
It's also important to remember, Foster said, that Medicaid beneficiaries are not the ones getting paid. The program gives low-income people access to consistent health care coverage.
'It's people that are showing up to the doctor and then maybe the doctor should be getting paid from one source versus another,' Foster said. 'But the patient themselves is just going to the doctor.'
If signed into law, the bill would go into effect Jan. 1, 2026.
This report was produced by the Gulf States Newsroom, a collaboration between Mississippi Public Broadcasting, WBHM in Alabama, WWNO and WRKF in Louisiana and NPR. Support for public health coverage comes from The Commonwealth Fund.