Medicaid expected to improve in D.C.

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D.C. Council Chairman Vincent C. Gray said moving the administration of the city's long-troubled Medicaid program to a new Cabinet-level agency will hasten reform in the long-troubled department.

"Moving towards creating a separate department would have to be influential to those who are concerned to say that the District is taking steps with this function to try to give it the autonomy and strengthened management that it needs to effectively do its job," Mr. Gray told The Washington Times.

The Medical Assistance Administration, which currently administers the Medicaid program, has been criticized for mismanagement and overpaying providers. A D.C. Inspector General last year said the city overpaid some health plans by roughly $97 million.

The council last month passed legislation moving the department's authority to a Cabinet-level agency called the Department of Health Care Finance.

The department had been a division of the Department of Health, whose director, Gregg A. Pane, was fired by Mayor Adrian M. Fenty in October.

The new agency will assume administration of Medicaid and the city's HealthCare Alliance. It will work to "ensure effective and efficient use of Medicaid dollars," according to the legislation, which was signed by Mr. Fenty on Dec. 27.

Mr. Gray said he would like to see an in-depth management review of the Medicaid program. The review would likely come after the mayor submits a transition plan for the new department, which is due by March 1.

"It's really an opportunity to do the kind of management review ... where we look at the existing policies and procedures and whether they're being effectively implemented," said Mr. Gray, a Democrat.

Mr. Gray said the review could extend to a forensic audit, an in-depth examination of financial records and transactions often used to look for the existence of fraud or abuse.

"It isn't as if there's some smoke and we're looking for the fire," Mr. Gray said. "There certainly are issues that have to be addressed."

The District's Medicaid program is funded jointly by the federal and D.C. governments. Its parent administration received a budget of $1.5 billion in fiscal 2007, but the program has seen its share of problems.

The Times reported last year that the District's Medicaid office had failed to sign off on hundreds of agreements with medical equipment suppliers, and that four of the top 10 suppliers were the focus of an ongoing law-enforcement investigation.

The D.C. government's Medicaid director also asked the U.S. Attorney's Office to investigate the findings of an internal health department review of two Medicaid health plans that found more than $15 million in excessive costs.

Meanwhile, the inspector general in December also blamed the District's mental health administration for using $30 million of city funds to pay Medicaid costs that could potentially have been reimbursed by the federal government, and an independent auditor's report last year identified the city's Medicaid program as a risk to the District's financial standing.

The transition of duties into the new department is expected to be complete by October.

David A. Catania, chairman of the council's Committee on Health, said he had initial concerns about the separation. But city officials added staff to three critical areas of the new department, including the unit responsible for detecting waste, fraud and abuse.

"I'm less concerned than I was before," said Mr. Catania, at-large independent. "Our goal has to be to minimize the obstacles that are innate to any reorganization."

Health Department spokeswoman LaShon Seastrunk said the council's oversight also will help improve the city's' efforts to recoup lost Medicaid dollars.

"Improving the operations of Medicaid reimbursements continues to be a top priority of the [Fenty] administration," Miss Seastrunk said.