Audit flags $250M in questioned costs, repeat compliance failures at Louisiana health department
BATON ROUGE, La. (Louisiana First) — The Louisiana Department of Health (LDH) is facing renewed scrutiny after a state audit flagged more than $250 million in questioned federal costs and repeated deficiencies in Medicaid oversight and financial reporting.
The Louisiana Legislative Auditor (LLA) released the findings as part of its Annual Comprehensive Financial Report and Single Audit of the state. According to the report released this month, LDH resolved only one of the prior year's audit findings. Ten issues from last year remained unresolved.
Among the most significant findings:
$168 million in federal questioned costs were identified due to LDH's inability to provide evidence that the state share of Medicaid expenditures was funded with allowable sources.
An additional $87.6 million in federal questioned costs stemmed from errors in the Federal Medical Assistance Percentage (FMAP) cost share tables used in financial reporting.
The audit also found repeated problems in key areas, including:
Provider enrollment failures: For the seventh straight year, LDH failed to enroll and screen all managed care providers, as required by federal law. Roughly 35% of providers paid during fiscal year 2024 were not properly enrolled and screened.
Financial reporting errors: For the fourth year in a row, auditors found that LDH submitted inaccurate financial reports and federal schedules, including misstated payables and incorrect application of federal Medicaid match rates.
Payroll control deficiencies: For the third consecutive year, the department was found to lack adequate controls for reviewing timesheets and approving leave requests. The Office of Public Health also failed for the fifth year to ensure payroll certifications for certain federal programs were properly documented.
Medicaid eligibility and service documentation gaps: LDH was again cited for failing to maintain sufficient documentation to support eligibility decisions, and for approving claims for services that were not adequately documented.
Behavioral health billing issues: The department has lacked adequate billing controls for behavioral health services under Medicaid and CHIP for six consecutive years.
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In correspondence included in the audit, former LDH Secretary Michael Harrington said the department is working on corrective action plans, including staff training, system upgrades, and efforts to strengthen internal controls. In several cases, LDH acknowledged the issues but has disputed the severity of certain findings, citing immaterial dollar amounts or differing interpretations of documentation requirements.
The findings come as LDH transitions leadership. On April 11, Gov. Jeff Landry announced that Bruce Greenstein would return as secretary of the department. Greenstein previously served as Louisiana's health secretary under Gov. Bobby Jindal and was later the chief technology officer at the U.S. Department of Health and Human Services.
'With his deep understanding of healthcare systems, from Medicaid to post-acute care, Bruce Greenstein's appointment marks a new era for Louisiana's healthcare,' Landry said in a statement.
The Legislative Auditor emphasized the importance of resolving these findings, warning that persistent noncompliance could jeopardize federal funding and undermine public trust in critical health programs.
LDH has not yet publicly responded to the latest audit since Greenstein's appointment. Louisiana First News has reached out to LDH for comment.
The full audit is available here on the Louisiana Legislative Auditor's website. A summary of the findings can be found here.
This is a developing story.
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