Legislative Joint Auditing-Medicaid Subcommittee
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I call the Medicaid Subcommittee of Legislative Joint Auditing Committee to order. The chair
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sees a quorum. I'd like to ask Representative Vought to say a prayer to open us. Our most gracious Heavenly Father,
Representative DeAnn Vaught
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we praise you and we thank you for this another day and for all your many blessings, Lord God. I pray today as we do this work, Lord God, that we bring honor and glory to your name. Holy Father, I pray that you lead, guide, and direct us all to your path of righteousness. And it's in
Jesus Christ's beautiful name I do pray. Amen. Amen. Thank you, Representative Vaughn. The first item of business on the agenda is the adoption of the
minutes from November of 2018. Those minutes have been sent out via email. That's all right. All right. Is there a second? Representative Long. All those in favor say aye. Any opposed? The minutes are adopted. Thank you. So the purpose of
this meeting, obviously we we haven't met in quite a while. And Senator Flippo, Chairman Lundstrom, we thought it would be a good idea to bring together kind of a primer, if you will, or a primer on the Medicaid
Audit Subcommittee. And so I've asked four different agencies to come and kind of speak about what they do and how the process works when it comes to Medicaid audit. And so we have some time constraints because there is an executive committee meeting at 1130. So I've got a hard stop at 1115. So I've asked each of the agencies to kind of limit their questions or their presentation to about 10 minutes and then we will hold questions until everyone is presented and that way we're sure we get through all the information and then we'll have questions. So write your questions down and we'll address them afterwards. Any questions before
we move forward? Fantastic. So the next item on the agenda is an overview of Medicaid subcommittee by legislative audit staff and we'll begin with the history of the Medicaid subcommittee. So Tim Jones. You are recognized
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to provide a history of the subcommittee. Thank you, Madam Chair. The Legislative Joint Auditing Medicaid Subcommittee has met a total of eight times before today. As shown on the slide, the subcommittee met twice in 2012 on back-to-back days, once in 2015,
twice in December of 2016, and three times in 2018. Minutes for the November 1st, 2018 meeting, which was the last meeting, indicate future meetings will be at the call of the co-chairs if necessary. According to the minutes from the first meeting on July 9, 2012, the Medicaid subcommittee was created initially due to questions regarding a legislative audit special report on Medicaid mental health services for fiscal years 2006 through 2011. Medicaid meeting topics included,
but we're not limited to questions about legislative audit reports and findings, Medicaid services, health care provider charges, eligibility for services, and questions for Department of Human Services staff. Today we have representatives from legislative audit, Department of Human Services, the Office of Medicaid Inspector General, and the Attorney General's Office to give brief presentations regarding their respective roles with Medicaid and general information on Medicaid.
Madam Chair, this concludes my presentation on the history of the Medicaid subcommittee. Thank you.
Staff will now present a summary of legislative audit's role related to Medicaid. David Gassaway, you are recognized. Thank you,
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Madam Chair. The purpose of this presentation is to provide an overview of the statewide single audit and legislative audit's role as it relates to Medicaid. The annual work related to Medicaid is largely performed in Arkansas's statewide single audit. This is an annual audit of non-federal entities expending federal awards.
To a lesser degree, some agency reported frauds could be reported on the annual financial audit of the Department of Human Services. The Single Audit Act of 1984 established requirements for audits of states, local governments, and tribal governments that administer federal financial assistance programs, also known as federal awards or federal programs. The Single Audit Act Amendments of 1996 extended the statutory audit requirement to nonprofit organizations and substantially revised various provisions of the 1984 Act.
2 CFR Part 200, also known as Uniform Guidance, establishes administrative requirements, cost principles as well as audit requirements for federal awards. The Office of Management and Budget, OMB, is the federal office that prescribes what must be tested in the single audit. However, OMB does not require all federal programs to be audited every year. Some large federal programs in the state can be tested only every third year if they have had no material weakness findings in the previous audit. However, Medicaid
is not one of those programs. Because Medicaid has historically been identified by OMB as high risk, it must be audited every year. As such, we audit Medicaid every year. Medicaid The state is the largest federal program in the state reporting $6.5 billion or 53% of the state's $12.2 billion in federal expenditures in the most recent single audit for the year ended June 30, 2024. In addition to the federal funding provided by the United States Department of Health and Human Services, the state is responsible for matching those expenditures according
to a computed rate called the FMAP or Federal Medical Assistance Percentage. The chart on this slide shows federal and state expenditures for the previous four years under audit, as well as the engagement year currently in process, fiscal year 2025. The CMS64 reports are quarterly expenditure reports that are filed by DHS with the federal grantor, the United States Department of Health and Human Services Centers for Medicare and Medicaid Services, or CMS for short. OMB issues a yearly compliance supplement with instructions to auditors on which areas
which steps should be performed in assessing compliance with federal regulations and state policy. A risk-based materiality driven approach is used in the planning of the audit work which generally includes a review of the following: eligibility of clients and providers, claims paid on behalf of clients, fulfillment of the state's expenditure matching obligations, a reconciliation of financial information to reports filed by the agency, special tests prescribed by the compliance supplement for nuanced objectives that have a less monetary focus than other areas.
Also, the state's implementation of internal controls for all of these areas
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must be tested. What have I done? Have a deal.
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Okay, almost there. Oh, there you go. You should be back. No. All right, why are you no one now? There you go. You're back now. Perfect, thank you.
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Audit findings discovered as a result of our audit procedures are communicated to agency management in a formal exit conference. Responses to those findings are collected from the agencies and they are submitted along with the findings to the Federal Clearinghouse prior to the March 31st deadline. The Federal Clearinghouse is a public portal through which CMS, the federal grantor, receives these findings and follows up with the state. The single audit is presented to the full legislative joint auditing committee meeting
annually, usually around June. The audit cycle continues the next year when subsequent year auditors perform follow-up procedures to determine if corrective action has been taken on these findings, which includes collecting management decision letters from the Arkansas DHS, which document the resolution of these audit findings with the federal grantor, CMS. This chart shows the number of audit findings for the Medicaid program for the previous five fiscal years. In addition to the single audit finding process discussed earlier, a Medicaid-related finding may be reported in the Departmental Financial Audit Report for DHS.
Those findings are presented at a meeting of the LJAC Standing Committee on State Agencies, and I'll discuss those types of findings after the single audit findings. The findings in the FY24 single audit can be summarized as follows. Deficiencies were noted in internal controls over the data matching used to identify Medicaid recipients who are no longer eligible for programs due to death or incarcerations. Costs paid for a contractor's work in the managerial accounting section were paid using 100 percent Medicaid funds when the work
performed was only 68 percent related to Medicaid. Deficiencies were noted to properly suspending and reinstating
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Deficiencies were noted in the internal controls over the eligibility
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of recipients. Also, the state had not established a Medicaid Recovery Audit Contractor or RAC program. Federal code requires states and territories to establish programs to contract with one or more Medicaid RACs to identify underpayments and overpayments and recoup those overpayments. States may request an exception to some or all of the Medicaid RAC requirements, which is what Arkansas has done in response to this finding. Also, overpayments recovered as a result of the Medicaid Fraud Control Unit, or MFUCU for short,
casework were not properly reflected in the quarterly CMS64 expenditure reports. Finally, deficiencies were noted in the internal controls over properly supporting provider eligibility determinations. The findings in the FY24 single audit were presented to and filed by the Legislative Joint Audit Committee in the meeting held on Friday, June 6th of 2025. We are following up on these findings in the FY25 single audit, which we anticipate to be presented in the June LJAC meeting.
The finding in the FY24 departmental audit of DHS can be summarized as follows. DHS discovered and reported to ALA 14 of its employees who provided false or incomplete information to receive benefits to which they were not entitled. 13 of these employees received $7,985 in benefits through the Disaster Supplemental Nutritional Assistance Program or DSNAP. The remaining employee received $5,837 in Medicaid benefits. The agency notified legislative audit of the apparent theft of public funds as required by
Arkansas Code. It's a statutory requirement for legislative audit to collect these and and refer them to the prosecuting attorney as well as the Attorney General. The FY24 Departmental Audit of DHS was initially presented at the LJAC Standing Committee on State Agencies on Thursday, January 8, 2026, where it was deferred because of questions that the committee had related to other findings in that audit. This audit will be presented again at today's State Agency Standing Committee meeting.
This concludes my presentation. be glad to answer questions at the appropriate time about legislative
Representative Carol Dalby
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audit role in Medicaid. Representative Dalby, you're recognized. Thank you, Madam
Chair. Just one quick question. A couple of slides back, there are too many—what's right there? Back up one. No, no, go forward. One more. That one right there. The state's not established a Medicaid recovery audit contractor
program. What did you say was our response? Because I was still wrapping my head around some of the other
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acronyms. Right. The feds will grant an exception for that if you go through the appropriate process
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and request that. And that's what I believe the state has done as a result of that. Okay, thank
you. Thank you, Mr. Gassaway. The next item on the agenda is the overview and oversight of Arkansas Medicaid program. This will include presentations from DHS, Office of Medicaid
Inspector General, and the Attorney General's office. If staff other than those recognized to speak, please introduce yourselves for the record. We will begin with the Department of Human Services, so Secretary Mann, Arkansas Department of Human Services, you are recognized. Give me one hug in a
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minute. You're going to stay and drive, right? I'll be right over there.
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It should be. You just got to get reloaded.
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Internet went down. Just give me one hug. Sure. Okay. I'll have it up. Thank you.
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good morning. Laurie McDonald, Chief of Staff, DHS. I'll
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talk from the slides, and Laurie will drive, and we'll try to keep it to as close to 10 minutes as we can. So what is Medicaid? Medicaid provides health care coverage to low-income adults, children, age-blind and disabled, and then we also do cover our expansion Group 8 of adults from 19 to 64-year-olds.
It is a state and federal partnership, and we work with the CMS, as described earlier, to have a state plan, which is a governing document in addition to statutes and rules to govern that program. So for our delivery system, Medicaid delivery system can be done in several different ways. Of course, Arkansas uses all three. Primarily, we are a fee-for-service state, which is we cover programs and we pay when it is utilized using different codes and different prices.
Managed care is a fixed member per monthly payment to MCOs. Then they arrange and pay for the care. We have a small managed care program, which is actually an accountable care organization program using the PASS program, which we have four MCOs that govern that program. Unique to the state of Arkansas, 51% of those organizations have to be owned by local providers instead of a large MCO program. Then the last option for Medicaid delivery is something also unique to the state of Arkansas.
We're the only state that uses premium assistance, which is how we govern and purchase and serve the adult expansion population. We go out to the insurance marketplace and we buy silver-level premium policies for the
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expansion program. So, quick overview of
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who we cover. We cover approximately one in three Arkansans in the state, almost one in two children. Currently, we have about 850,000 Arkansans enrolled in Medicaid, which is where we get the one in three based on a 3 million population.
We do cover 50% of the births in the state every year, and we do cover 80% of the behavioral health services. We use fee-for-service for our core populations, the managed care for our highly complex, and then, as stated, the premium assistance for the expansion. Then there's a breakdown of how we cover that $850,000 and the numbers for you
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on the next slide, which does show the majority of our population is covered by fee-for-service. Next slide breaks it
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down a little bit further for you to see our kids' home, A and B,
the Medicare Savings Program, SSI, parent caretaker, several different of our large population and the numbers currently enrolled. And we did pull this as of February 8th to have the most current numbers. Next slide shows a little bit on our annual eligibility limits. Majority of Medicaid is determined by income levels and the number of people living in the household. And then, depending on different programs, could have different requirements after income eligibility is determined.
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Long-term care also has a medical determination, for example.
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Next slide shows you the internal oversight mechanism at DHS. We are a large agency. There's approximately nine divisions, and all of these divisions do something that benefits Medicaid. So we wanted to give you some information on who does what. DCO does our eligibility. DDS is our developmental disability service. OSAM is our mental health and behavioral health.
DIP squat is our license and certification, just for examples. DMS, Division of Medical Services, It's covering the bulk of our fee-for-service population. Next is the fun part. Everyone wants to know about our budget. So for SFY26, we have an approximately $9.7 billion budget as prescribed in our annual operating plan. And here we have shown you how we think it will be divided up and spent by the end of the year.
And then on the next couple of pages, it just shows you what is covered in those different areas, broad categories. Institutional medical is inpatient, outpatient hospital. Non-institutional medical is an array of services from ambulances to FQHCs to lab and x-ray to rural health clinics. Then you have your long-term supports and services, which does cover two waivers for independence and living choices, hospice, nursing home, personal care, private nursing facilities, and PACE.
We do have two state-run facilities, an Arkansas nursing home and a psychiatric hospital, or human development centers in this category. Apologies. Medicaid services for rehab and HAB includes our autism waiver, our EIDT, our ADDT, outpatient behavioral health, private duty nursing, and PT, OT, and speech. And then our non-claim-based payments, this is my least fund category. So these are where we pay our contracts. We also pay for some programs.
But we also have an obligation in our state plan with our dual eligibles, which are eligibles that are eligible for Medicare and Medicaid. So we, as the Division of Human Services or Department, we will pay for those Part A and B premiums. We also pay for the state contribution of their prescription drugs,
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which is commonly called the clawback for Part D. That's why it's my least favorite, because I don't get to choose if I
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pay those. I just have to pay them. Next category is our capitated payments, which is where our home, PASS, and the PCMH and our non-emergency transportation payments reside.
And then pharmacy is a standalone category at $473 million a year. And then I think our last category is supplemental payments. So we pay supplemental payments based upon prescribed statutes and rules and state plan to different types of facilities. Those can include provider fees to put up the state share or be funded by the state. Then we added a slide on changing the Medicaid program.
There have been a lot of questions when we bring rules forward and how that is governed. So a state, I wanted to give you some information on a state plan amendment is primarily used for our fee-for-service program. And a waiver request is actually a separate document which gives, it waives some of our state plan requirements to serve a certain population in a certain way. So we have a very specific waiver for a very specific population that we're trying to serve. They differ.
State plan amendment can be retroactive for a couple of days, up to 90. A waiver request cannot. Those are the big differences that we always get lots of questions about. And then I think to finish up, we wanted to show you the Arkansas Medicaid providers. We have almost 118,000 Medicaid providers in the state. And on this slide shows you where they are by county. And then I did include a slide on program integrity, but
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others are going to speak in detail on that.
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So I will conclude there. Thank you, Secretary Mayer. Thank you, Ms. McDonald. The
Representative Carol Dalby
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next presentation. Whoa, whoa, whoa, whoa. I'm going to try and pull a question. Well, it's not a question. It's to the chair. Oh, yes, ma'am. You're recognized. Madam Chair, can we have them as staff to send these out? I would like to admit that I could see those letters, but I can't. And so if you could please have staff send this to us so we'll have that information.
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Thank you. Would that be possible? Yes, ma'am. I think we had provided it late yesterday afternoon, so it should be available for y'all. Perfect.
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Thank you. Oh, okay. We'll get it to you, Representative. Thank you, Secretary
and Mayor. The next presentation is from the Office of Medical Inspector General, Secretary Bragg and Samantha Blasingame. Director of the Office of Medicaid Inspector General, you are recognized.
Representative Wayne Long
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Thank you, Madam Chair, members of the committee. I'm Allison Bragg, Secretary of the Department of Inspector General.
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And I'm Samantha Blasingame, Director of the Office of the Medicaid Inspector General. Are you going to do that? Okay. OMIG's mission is to detect and prevent fraud, waste, and abuse in the Medicaid program. We wanted to tell you all a little bit
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about the history of OMIG and how it came to be its own entity.
As I mentioned, I'm the Secretary of the Department, and so the Department of Inspector General is where OMIG, the Office of Medicaid Inspector General, is housed. So sometimes that can be confusing since those titles sound so similar, but OMIG is an agency within that department. And it became that, it became its own entity in 2013. Initially, and Secretary Mann had referenced the program integrity function. There's a federal requirement that Medicaid maintains a program integrity function just for accountability purposes.
Until 2013, that was held within DHS. In 2013, the legislature moved that into its own independent entity. And the statute that does that is listed there. And then these bottom bullet points are parts of the statute that indicate why that was done, essentially to consolidate those prevention and recovery functions into one single and independent office where they could reorganize and streamline those processes. And that's what we continue to do today.
And then in 2019, of course, with transformation, rather than having so many separate agencies, it became part of our
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department. So our office does a lot of things. It really turns on whether we think somebody is stealing on purpose or they've made a mistake. If we think somebody's stealing on purpose, which we're going to figure that out through audit, data analysis, and investigation, we stop there and we gather the evidence that we have and we refer the case to the attorney
General's office or another law enforcement agency to see if criminal charges will be appropriate. And we also at that point make sure and stop payments to that Medicaid provider while that investigation is ongoing. And we call that suspension. We also then, if we think it was just a mistake or an education issue, we will go ahead and take that money back from the provider that was paid improperly, and we'll educate them so that doesn't happen again.
We just get that money back in the state's bank account. And then the last thing we do, when we see trends, we will recommend to DHS potential policy changes or rule changes for
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their consideration. This is a snapshot of the tangible results that OMIG is able to produce, and we've included the last four years prior to now. As you can see, in 2022, there is that number there, 840,000.
And then in 2023, obviously, there was an administration change and a large-scale staff change all across OMIG. And that is where we started to leverage existing contracts with DHS, relationships with vendors, and were really able to utilize those resources. We did not increase staff. In fact, I think we have fewer staff than we had in 2022, and we're able to really double down on the resources available to us and increase those efficiencies. I was able to join the department in 2023, and then shortly after that, Director Blassingame came on and really amplified our ability to identify funds for recovery.
And that results in this much larger number, almost 10 times what we were recovering in
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the beginning. So, some of the common issues that we see, several of them are just like physical impossibilities. So, somebody is in two places at once, for example, is what the billing shows. Or a beneficiary is receiving, supposedly receiving services at the same time, which is rarely okay. We also see things like impossible days.
So, like, a provider billing 24 hours in a day, 25 hours in a day, 16 hours in a day is an impossible situation under the rules. We see a lot of issues with background checks not being run, and then, of course, a lot of missing documentation. And then also upcoding, which is just a provider saying that they are doing something that's a little bit more complicated than what they're actually doing. so they can get more money for that.
Representative Wayne Long
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Secretary Mann mentioned this, and I'm sure you'll hear it after we speak as well, but we are not completely independent. We
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work together with other agencies, both state and federal, and we're excited about that. We're happy to be able to have those partnerships. Those include, obviously, the Department of Human Services. Our friends at the Arkansas Attorney General's Office, I noticed that MFUQ got a good laugh out of everybody, so that's one of everyone's favorite acronyms, but we work very closely with them, as well as some federal agencies as well that are listed here. We also issue quarterly reports as well as an annual report,
and those are available online at our website, which is ig.arkansas.gov, and that reflects those numbers that you saw earlier, as well as a lot more granular detail of how we arrived at those numbers. That concludes what we have to present to you all today, And we look forward to any questions that you have
later in the hearing. Thank you, Secretary Bragg and Director Blassingame. The next presentation is from the Attorney General's office. Justin Brasher, Senior Assistant Attorney General, and Tammy Harrelson, Deputy Attorney General, Medicaid Fraud Unit.
Justin Brasher
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You are both recognized. Okay, thank you. Good morning, Madam Chair. Thank
Jein Brasher
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you very much for having us. My name is Justin Brasher, Senior Assistant Attorney General with the AG's office. I have Tammy Harrelson with me. She's the deputy in charge of our Medicaid Fraud Control Unit, or MFUQ. And third time, and I still got a little bit of a laugh. That's awesome. And so we're just going to talk a little bit about what our office does in relation to Medicaid, particularly with the fraud control. So if you want to go ahead.
Representative Carol Dalby
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you for having us. Mafuku, as we are affectionately known, is the organization that actually prosecutes criminally Medicaid fraud. We also are able to prosecute civilly if we decide after an investigation that there is insufficient evidence to prove criminal intent. And so then we'll just bring a money judgment against the providers. The MFUCU only is able to prosecute Medicaid providers.
We do not do beneficiaries. CMS provides 75% of our funding, and so we are obviously bound to some of the federal regulations. And those regulations have broadened our abilities over the years. We now can also prosecute neglect in long-term care facilities. We can prosecute abuse in long-term care facilities.
These include any sort of nursing home, any boarding care facility. We also are able to do exploitation. So if you have your grandmother that is in a nursing home, And she is being exploited either by a caregiver there or by a family member. We are able to go in and do those. There has to be a Medicaid nexus somewhere. Either she's a Medicaid beneficiary or the home in which she is living actually is paid by Medicaid.
So our authority has expanded in the past few years, and we're excited to be able to do a lot with that. We are the end of the road as far as the Medicaid fraud train goes. We work very closely with DHS and with the Inspector General's Office and OMIG. We work with DF&A. We work with federal partners such as DEA.
We work with the FBI. We work closely with the U.S. Attorney's Office because they have similar, very similar laws to what we do. More than anything, we have been proud of some of the stats that we have where y'all, we sent them out yesterday. Madam Chair, were those included in the packets? I think
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they're on the slide, I think. Have we got a slide? Yeah. They were included in the packet as well. There we go. Okay, even better.
You'll see the first chart on the left-hand side at the top.
Representative Carol Dalby
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These are the investigations that we have actually opened this past year. As you'll see, it runs around about 100 every year. This has increased from the last administration. The blue is the criminal, and then the gold are the civil investigations. We have really pushed trying to add additional civil investigations, and so we've been able to get those up. they were lower than that in 2022, but we're running about 56 a year now on civil and about
103 on criminal. This does not include, we have another 250 cases that are out there that we monitor at any one time, or we're providing data to the feds. So this is not just our entire workload. The criminal restitution and costs and fines are on the right. These generally stay low unless we have a big provider. A lot of our cases are somewhere around the $5,000 range, $10,000,
but occasionally we'll get those that are much, much higher. This one from 2025, a lot of this was the Schwartz case, the nursing home owner that agreed to repay the state over a million dollars. And then at the bottom, you've got the actual restitution that we have brought in, as well as the costs and fees. The blue is the criminal, and the gold is the silver, I mean, it's the civil.
This year, we've started well. It's middle of February, and we have had a million-dollar verdict, and so we're doing well there. And then just to make
Jein Brasher
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sure that we clarify, so what we're talking about in terms of the criminal restitution and costs,
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that right-hand graphic, that's what's been a court has awarded us is not necessarily what we have collected, right? Those are two different things. Yeah. Something that you probably need
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to know a lot of people don't realize about us
is that we don't keep, the
Representative Carol Dalby
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Attorney General's office doesn't keep this money. This money goes right back into the Medicaid program trust fund. The federal, yes, the federal government actually then gets the FMAP part of it, which would be about 70% right now. And then the state Medicaid program actually gets to keep the other 30%. So it goes out of the, it goes right through the Attorney General's office, right back into the coffers, so.
I think that's all we got, right? There we go. Perfect. These are the criminal actions and civil actions that we have actually filed. We've had a real push to make sure that we file as many criminal actions as we can. The average most years prior to this were somewhere around 16. They had one really good year, but the average was about 16, and that's what it was when this administration came in at 2023.
But we've had a real push to go forward from there. We've had more actions coming in, more investigations coming in than normal. And we've been able to investigate those and make good on them. The civil actions are low. Most of these are key TAMs or whistleblower cases. We've always said that if we, the more civil cases that we actually have filed, you're doing better, the fewer that you can file.
So if you can get them settled ahead of time, that's what we aim for. And all of the restitution that you see from last year in civil actions, those were strictly from settlements. And so what we try to do is do the investigations on the front end so that when we approach the provider and say, hey, you've got a problem, they'll go ahead and pay. And 99% of the time, that's exactly what happens. So we're pleased with
Jein Brasher
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that. Could you briefly just explain what
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our relationship is like with local prosecutors' offices in terms of doing these criminal actions?
Speaker 98
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So generally, we don't have our own authority to go into a district
Representative Carol Dalby
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38:11
and file a criminal or civil act. Well, we can file civil, but not criminal. We have to go to each local prosecutor. And so we have worked out agreements with many of those, and they will appoint us as special deputies. Medicaid fraud is a very different bird to try to prosecute. One of my prosecutors was there for 26 years at the Plaski County Prosecutor's Office.
I was there myself for about six years. And so it's a little different from just a regular murder. It's different from a regular assault. And so usually the prosecutors are happy to have us handle these. We also have a prosecutor that worked at a human development center for 10 years. And so she does most of the abuse in the institutions. And so the prosecutors are happy to have her come in and handle those cases.
Jein Brasher
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So, yeah, as I'm sure a lot of y'all are aware, so the attorney general's office does not
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have its own prosecuting authority. we have to be appointed as a special prosecutor in any case to prosecute a case to file charges. And so that's what we are generally appointed by the elected prosecutor, sometimes by the court or a judge will also do that. And I believe that concludes our presentation. And we're happy to take any questions when the chair is ready for us to
take them. Yes. Thank you, Mr. Brasher and Ms. Harrelson. Committee, you've heard all the presentations.
Are there any questions for staff or
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representatives of these offices? Representative Dalby, you're
Representative Carol Dalby
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recognized. Thank you. Thank you, Madam Chair. I think you at the very end answered my questions. Are these mostly being filed in state court or do you go to
federal court? The civil actions are often filed in federal court because they're whistleblower actions, key terms. But all of the criminal actions, almost all, are filed criminally. Occasionally, we will file something in federal court if we are working with the U.S. Attorney's Office.
And in follow-up, and I think you answered my question, because I've been writing questions down that
came to me. So you're filing them in the jurisdiction where that provider is located? Medicaid fraud, I'm sorry. No, no, no,
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go ahead. Medicaid fraud cases are always filed in Pulaski County. Okay, I
Representative Carol Dalby
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wondered about that. Yes, and the judges here, they're familiar with the cases, they know how they work. If it is an abuse, a neglect, or exploitation, it is generally filed where either the defendant is or the actual institution or the victim is.
Okay. And I think most of y'all know I live in Texarkana and, you know, go across the state line and you're going to have Medicaid folks, providers over there. Yes. And so what do you do in that case? I mean, we're going to have West Memphis, Memphis, you know, the outlying areas. Are you able to cross
that state line or is that when you're going to the federal prosecutor, the feds to do that?
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Generally, if they, so let's say we've got a doctor that
Representative Carol Dalby
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41:24
is in Texarkana or just over the line, actually lives in Texas.
But if he is providing Medicaid services to Arkansas beneficiaries, then we can go ahead and we will actually file it in Arkansas. Occasionally, we've had to reach out to, say, Texas or Tennessee, Oklahoma. We do that regularly if we need to, and we'll work together with them to determine the best place to file a case. Okay, great. Thank you. Thank you, Representative. Representative Brown, you're
Representative Matt Brown
Unverified
41:56
recognized. Thank you, Madam Chair. On the civil actions that y'all file, is there some mechanism, are they suspended from being a provider when you have to sue them?
Or are they able to still be a provider? And if they are, is there some mechanism that you're able to set off
Speaker 109
42:16
against payments, maybe that are legit, to collect for the ones that were
Representative Carol Dalby
Unverified
42:21
not legit? Just how does that work? Generally, in civil cases, we don't suspend. We can't suspend anywhere. We go to OMIG for that. But we don't suspend in civil cases. There is a mechanism where we can go through the court and ask that either anything that they receive gets set aside and held, say,
or that generally we don't do suspensions for civil cases. Follow-up, Mr. Chair, or Madam Chair? You're recognized. Do you all have any idea, and
Representative Matt Brown
Unverified
42:53
this is kind of unfair, I'm assuming that would probably be some sort of a federal requirement, though, to change that, like we probably couldn't do it at the state level. It just seems to me like if you catch somebody, you know, committing fraud, you know, you turn off the spigot immediately. But I'm assuming we probably can't do it at the state level. Actually,
Speaker 98
43:08
I think that there are ways that we could do that. And I'd like to be able to talk with you at some point if you'd like to go forward with that.
Senator Jim Petty
Unverified
43:15
All right. Thank you, Madam Chair. Senator Petty, you're recognized. Thank you, Madam Chair. I've got a couple of comments, and then my question is going to be for the Office of Inspector General. So, just a general comment, in listening to what the Attorney General's office and especially what the Office of Inspector General and OMIG do, to me at least it makes sense why this committee is not necessarily meeting regularly because we have a lot of concerns about fraud
in general and the Inspector General has been doing that as well as the Attorney General. Second, it appears that, unlike some of the other states across the country, that we have a pretty good handle on fraud. Doesn't seem to be at least identified at this point, a large number, which is encouraging for us as legislators, but also the taxpayers. And then finally, for the Office Inspector General,
There were, it went from $800,000 to several million dollars, and if I remember the slide right, it was like identified for potential recapture. Can you expand on that slide just a little bit and what you mean by that and kind of what those numbers in actual recoupment or potential recoupment, just kind of expand on that just a little bit more? Certainly, and Director Blassingame and I went
Speaker 80
44:47
over this yesterday preparing to visit with you all about how much detail to give on that proactively before you ask that question.
And in order to keep it under 10 minutes, we eliminated a lot of that. But I'm so happy that you asked that because that's a really important part of identifying the recovery versus actually collecting those recoveries. In our quarterly and annual reports that are online, we delineate those dollars and there is a separation between here's the amount that is identified to be recovered versus the amount that has been actually recovered. For example, if you were to look at our 2025 annual report or our most
recent annual report, you'll see that as two separate numbers. The numbers on the slide today were the dollars identified for recovery. That felt simpler and cleaner to explain from a bird's eye view. We can certainly get you as granular as you would like. They're on our website and we're happy to send them to you as well. The difference year to year is usually just a matter of chronology. So we might identify a lot of money in November, December, and then we start, excuse me, we start
trying to recover that, and then maybe that's not paid back into the Medicaid system until the following calendar year or the following fiscal year. So it might be reported in the next year's
Speaker 88
46:12
totals. So those numbers will never be entirely congruent, but we're always pursuing those dollars that have been
Senator Jim Petty
Unverified
46:19
identified. Follow up, Madam Chair. You're recognized. So just one more clarification. So at the point it goes on the list as identified for, you know, potential, at that point, it has been determined that it is a fraud or a mistake and then you've moved. It's not, we've identified
some potential here and then we've got to investigate some more. Once it gets on that list, it is public funds at risk that you're going to
work to recover. Okay. Thank you. That's
Representative Wayne Long
Unverified
46:50
right. Thank you. Representative Long, you're recognized. Thank you. Thank you, Madam Chairman. Earlier, it was brought up that I believe that by the AG's office that you all prosecute, I guess, institutions that are committing fraud. I was wondering, could somebody address, is there anybody that is authorized to investigate
and prosecute individuals, recipients that are committing fraud? The reason I ask, you know, around town sometimes you see these signs up that says, like, we You buy medical testing equipment or medical supplies, that type of thing, which I would think is probably coming from Medicaid. So somebody's obviously getting these things for free and selling them to someone. I was wondering if we actively investigate those. Thank you. Yes, sir. The question that you're identifying is
the difference between provider fraud, which is the focus that you've heard a lot about today,
Speaker 80
47:45
versus beneficiary fraud, which has come up, but perhaps not in as much detail. We have the ability to investigate that. There's also a component of DHS that works on that. We saw a slide from Secretary Mann that talked about their division of county operations and how that focuses on eligibility, beneficiary eligibility. Our statute, our establishing statute, does authorize us to do that. We sort of have a friendly agreement with DHS that a unit of theirs, payment integrity, handles beneficiary fraud to the extent that they're able to work on that.
They do that, and we focus our efforts and our resources on provider fraud. As you can imagine, there is some overlap there, and that's why we do maintain that relationship and a close working relationship with that unit and with the department as a whole. From a prosecution standpoint, as you know, neither we nor DHS are a prosecutorial body. So if there were beneficiary fraud that rose to that level, that would probably be referred to the appropriate county prosecutor to handle from
Representative Wayne Long
Unverified
48:49
there. Any idea how many individuals were prosecuted in, I guess, the last fiscal year?
Speaker 80
48:56
On beneficiary fraud, I wouldn't be able to. We're not related to those prosecutions, so I'm sorry. I wouldn't have that information, but we can probably point you in the right direction. Maybe someone at DHS would be able
Representative Carol Dalby
Unverified
49:08
to get you that. I'd appreciate it. Thank you. Yes, sir. Representative Dalby, you're recognized. Thank you. Thank you, Madam Chair. Excuse me. Secretary Bragg, how many attorneys, I'm just curious, how many attorneys are in your office? I mean, because you've obviously got to have somebody that's overseeing it. You're not doing it necessarily.
Speaker 80
49:27
Director Blassingame is where the buck stops. So the buck stops with me because I need to be responsible. she is the director of the OMIG unit. She is also an attorney. We have one other attorney on staff dedicated to OMIG. And then we have a shared services attorney that can help as needed. And I forget this sometimes, but I'm also an attorney. So we have four. Well, hopefully you've
Representative Carol Dalby
Unverified
49:51
paid your bar dues and all that good stuff. Okay. And they just handed us the stuff so we could see it. And
And I noticed that in one of the things that y'all are in charge of, and I've already lost the page, but basically for suspending providers or drop them, have you aggressively done that for people who are frequent flyers through your office? And do you have an idea of how many providers your office has suspended? Certainly. The
Speaker 80
50:25
number is definitely in our annual report and in our quarterly reports. And tell me, where
Representative Carol Dalby
Unverified
50:31
do we find that online?
Because I didn't know your annual report was online. Yes, it's at
Speaker 80
50:38
ig.arkansas.gov. And there is a button for OMIG that has a little picture, and you can click on it, and then it just has them listed under reports. And I'll also be
Speaker 80
50:50
it up. I just didn't know. So that's where that number is found? Yes, and you had mentioned frequent flyers. We certainly do that for frequent flyers. Our standard for suspension is what's called a credible allegation of fraud. So I came from the U.S. Attorney's Office, and my barometer for thinking about that is always probable cause.
Is it more likely than not? Are there indicators here that this is a probable allegation, a credible allegation of fraud? And once that happens, we can suspend, whether or not they are a frequent flyer. We can also lift that suspension. If we hand that off to the Attorney General's Office and they determine that it doesn't rise to that level, we can lift that suspension, but we always want to act as quickly as we can to preserve and protect those government dollars because they don't need to be going into a situation where there is fraud involved.
And so we can and do turn off that spigot
Speaker 144
51:44
as quickly as we can. One other question. You recognize
Representative Carol Dalby
Unverified
51:48
me. I wrote a lot of questions. No, go ahead. It's great. And this may not fall to you. This may fall to Secretary Mann's department. But y'all are all working interrelated anyway. So you mentioned, I believe it was in y'all's presentation, you mentioned the education of these providers. And are y'all responsible for educating these providers as to what they can or cannot do?
And if so, you know, what are the major issues in that education? I believe it was y'all that mentioned that. And so I'm just curious, what is that process? Let's just say Representative Schultz here, y'all flagged him, you go talk to him, and then do you say, hey, look, this is an issue, here's how you correct it, or do you pass that on to DHS or somebody else? I'm just curious because we all want to see it done, but sometimes it's a lot easier to say somebody else will get in contact with you and then he never hears.
So I'm just curious as to that process.
Speaker 80
52:55
When it's an issue that our office identifies, we will do that corrective education and we'll do it while we're working with that provider on that audit. I know there's also front-end education for providers provided by DHS. Ours is more from the standpoint of the safety net. Okay, here's a finding that you had in a Medicaid audit from OMIG. Let's work with you on the mistake that was made there. We know it wasn't an intentional fraud situation.
We just want to help you understand the coding better, understand the billing better, and not make that mistake that results in that money going out again. So we would step in at a corrective point once that mistake has been made, as opposed to preemptive education, which I believe DHS
Speaker 72
53:41
would provide. Okay. Thank you. Thank you very much. Thank
Senator Steve Crowell
Unverified
53:46
you, Madam Chair. You're welcome. Yes. Two questions. Number one, that report that's monthly or quarterly, I would love to see the
committee at least get that email to us because we know it's there, but we're going to forget. And then when it pops in our email, it'll be like, ah, we need to look at that. And then, this may not be for you, just a thought process for me because we've got budgets coming up. Do we know what our new FMAP number is going to be? Is it going to be worse? Better? Okay,
Speaker 17
54:22
all right. Thank you. Are there any other questions from the
committee? Seeing no other questions, I'd like to thank the secretaries and
directors. I have a question for Secretary Mann. Okay, Secretary
Mann, would you come to the end of the table, please?
Representative Carol Dalby
Unverified
54:45
Thank you, Secretary Bragg. Oh, it's a simple question from a simple mind. My question is a number of years, well, sessions ago, I've kind of forgotten when it was, but we passed our home
and that deals with these providers and Medicaid and hopefully getting people off that program. How's that working?
I'm just curious because I don't sit in
any of those committees and I haven't heard any reports as to how our home, oh, that may not be what we're
Speaker 63
55:17
calling it now, I don't know, but you know what I'm talking about, Janet. I believe so. So, expansion population is called our home currently. We are working towards community engagement slash work requirements, which is, I believe, what you were referring to. With the passage of HR1, those are to be implemented by January 1 with
work requirements. We are working rapidly through that process. We plan to launch softly live on July 1 with no punitive, but mainly education, working with providers, working with beneficiaries, working with the community of here is the new program, here's how it will look, going all the way up to that process, except if you don't fulfill this, we will be terminating your coverage. On January 1, that will change, and then new applicants will have to have a period of community engagement to become eligible.
And then we will be doing redeterminations on Group 8 or the expansion every six months, of which they will then have to meet that requirement. Is that what you
Representative Carol Dalby
Unverified
56:30
were asking? It is. It's just that this is outside of any committee I ever sit on to hear your updates,
and I was just curious. so I appreciate that very much. Thank you. Yes, ma'am. Thank you. Secretary Ma'am, before you go, Representative Long asked a question about beneficiaries that were fraudulent. Can
Speaker 63
56:47
you address that at all? Yes, ma'am. I can. Thank you. So within DHS and DCO and then Security and
Compliance, we have a unit that focuses on beneficiary investigations, and we handle those for Medicaid and SNAP. When those are identified, they are referred to the local prosecutors for prosecution. And do you have a feel for how many you see
Speaker 112
57:10
coming through? No, ma'am. We did text to see
Speaker 63
57:14
what they were. We did see an uptick as reported from legislative audit on DSNAP, but outside of those numbers,
Speaker 64
57:20
I don't have an updated number, but we're more than happy to have it pulled.
Speaker 14
57:26
Okay. I'd appreciate that. Thank you. Yes, ma'am. Any other questions? All right.
Committee, again, thank you to each of the secretaries and directors for being here today. I really appreciate just the information that you shared. And, Committee, you should have a copy of all the slides that were shared, and I look forward to seeing you next time. Meeting adjourned.
Agenda
A. Call to order by Chairman.
B. Adoption of the minutes of the November 1, 2018 meeting.
C. Overview of Medicaid Subcommittee 1. History of Medicaid Subcommittee 2. Legislative Audit’s role related to Medicaid
D. Overview and Oversight of Arkansas Medicaid Program 1. Department of Human Services 2. Department of Inspector General – Office of Medicaid Inspector General 3. Office of the Attorney General
E. Other Business.
F. New Business.
G. Adjournment.
500 WOODLANE ST., STE. 172 • LITTLE ROCK, ARKANSAS 72201-1099 • PHONE: (501) 683-8600 • FAX: (501) 683-8605 www.arklegaudit.gov
Documents
| Title | Type | Pages | Source |
|---|---|---|---|
| Agenda — LEGISLATIVE JOINT AUDITING-MEDICAID SUBCOMMITTEE, Feb 12, 2026 | Agenda | 1 | Official source ↗ |
Speakers
Representative Mindy McAlindon Chair
Unverified
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Representative DeAnn Vaught
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Speaker 23
Representative Carol Dalby
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Representative Wayne Long
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Justin Brasher
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Jein Brasher
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Representative Matt Brown
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Senator Jim Petty
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Senator Steve Crowell
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