Auditors review childcare grants, pharmacy dispensing fees and EBT vendor misuse; office seeks staffing and technology
Loading...
Summary
Auditors told the committee they are vetting childcare grant allegations, auditing pharmacy dispensing fees where $10.50 dispensing fees are charged on over‑the‑counter prescriptions, and seeing patterns of EBT/vendor misuse; the office said it lacks 8–9 FTEs and recommended more staff and anomaly‑detection software.
The inspector’s office told the Public Health and Welfare committee it is investigating multiple non‑Medicaid issues that auditors and investigators have flagged, and it asked lawmakers for resources to expand work.
Childcare: Auditors described two recent allegations: one in which a neighbor reported seeing no children at a licensed childcare address, and another where about $1.7 million in grant funds intended for playground or construction work had unclear supporting evidence. The presenter said House Bill 2217 expanded the office’s authority to examine childcare matters.
Pharmacy dispensing fees: Auditors are reviewing whether dispensing fees (about $10.50) are being paid when doctors write prescriptions for over‑the‑counter medicines and whether pharmacy benefit managers (PBMs) capture part of those fees. "Doctors unknowingly are writing these scripts thinking they're helping the Medicaid beneficiary get medication at no cost, but it ends up costing the Medicaid program an additional $10.50," the presenter said.
EBT and vendor misuse: The presenter explained common fraud patterns — beneficiaries selling EBT benefits, vendors accepting EBT without required food inventories, and coded transactions that mask ineligible purchases — and said federal enforcement resources (USDA OIG) are thin. He recommended targeted vendor inspections, better loss‑prevention cooperation with retailers and more investigative staff.
Staffing and tools: The office said it currently has 14 employees (audits, investigations and admin), hired only one of the nine FTEs approved last year and remains about eight staff short. The presenter argued additional investigators and anomaly‑detection software would allow the office to open more investigations and stop ongoing losses; he estimated individual fraud cases often involve $10,000–$30,000 in improper benefits and described stopping future payments as a key source of savings.
Next steps: auditors will continue childcare and EBT inquiries, quantify related SNAP/WIC/TANF costs tied to other audits, and requested funding and technology to scale detection and enforcement.
