Monthly Archives: January 2016

California Overcharged Medicaid by $20.3 Million in 2010

19 Tuesday Jan 2016

Posted by in Agency, California, Government, Office of Inspector General (OIG), Spending, Uncategorized

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A Federal investigation discovered California withdrew more funds from its Medicaid account than justified. The state also obtained funds for expenditures it failed to report. Even after a direct demand from the Feds, California has yet to take appropriate corrective actions for the $20.3 million overcharge. Instead, state agency staff moved federal funds from other accounts, erroneously claiming those actions satisfied the shortfall.

On December 17th, the Office of Inspector General (OIG) released results from an audit performed on California’s Federal Medicaid account. The investigation was sparked by an earlier audit of state Medicaid programs for 2011 after a Federal audit showing $1.3 billion in federal over-funding nationally.

In order to fund Medicaid programs, states anticipate the federal portion and submit quarterly grant requests. These funds are administered by the Centers for Medicare & Medicaid Services (CMS) and held in a Payment Management System (PMS). The states then withdraw these federal funds throughout the quarter. At the end of each quarter, states reconcile the account by either refunding back to or withdrawing from the federal account to cover verifiable expenses. They then submit a Quarterly Medicaid Statement of Expenditures for the Medical Assistance Program, federal form CMS-64. In the case of California’s PMS account, fiscal year 2010 shows a discrepancy of $20.3 million.

Specifically, the OIG found the California Department of Health Care Services (DHCS) withdrew more funds from its Federal PMS account than expenditure reports support and it obtained funds for expenditures not reported. It also found the state did not take appropriate corrective actions for the $20.3 million.

Additionally, $88.5 million of expenditures are reported on the state’s 2010 CMS-64, although $80 million of adjustments reducing expenditures are not. Lastly, DHCS failed to withdraw Federal funds from the appropriate accounts. The OIG found the state regularly used the current fiscal year PMS account, rather than the account for the year correlating with their reports. This practice caused annual account balances to be incorrect.

Following the investigation the OIG issued the following recommendations to California:

  1. Refund to the Federal Government $20,340,232 that was not supported by net expenditures.
  2. Work with CMS to resolve the $88,465,923 of expenditures and $80,004,306 of reported adjustments for FY 2010.
  3. Ensure that it obtains funds only for reported net expenditures.
  4. Implement policies and procedures to resolve differences between the amounts awarded and obtained and the reported expenditures.
  5. Ensure that it can support the amounts it withdraws from its PMS accounts and reports as adjustments.
  6. Ensure that it reports the appropriate amounts.
  7. Strengthen procedures to obtain funds from the appropriate PMS accounts.
  8. Review the amounts it obtained from PMS accounts for FY 2011 and later years to determine whether they were supported by net expenditures and refund any amounts that were not adequately supported.

In response, the state agency agreed with OIG’s recommendations #1 through #2, and #6 through #8.

Yet, as of the release of the OIG’s investigation report, California had not addressed recommendation #5, and it had not refunded the Federal government the $20.3 over-draw. Instead, and without evidence of approval by CMS, the state transferred funds from other PMS accounts associated with years 2009, 2011, and 2012. Effectively, the state paid back the Federal government with its own money.

In addition, the state’s response to recommendation #4 failed to satisfy the OIG. During the investigation, OIG reviewed reconciliation procedures, including those implemented in March 2012. The OIG responded to DHCS claim of procedural improvements stating, “We reviewed all of those during our audit and determined that they were not adequate to prevent the issues identified in our report.”

As of yet, California has not improved processes in areas of concern, accounted for millions of dollars in Federal Medicaid funds, or offered any assurance the U.S. taxpayers will not continue to be burdened by the incompetence of government agencies with union protection against any measure of performance accountability. The final sentence of the OIG report does give some measure of comfort this will not conveniently go away:

“After reviewing the State agency’s comments, we maintain that our findings and recommendations are valid.”

This post was authored by NCPA research associate Belinda Silva.

– See more at: http://healthblog.ncpa.org/california-over-charged-federal-medicaid-by-20-3-million-in-2010/#sthash.P6GL8kBi.dpuf

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Tobacco: Top User of Agriculture Guest Worker (H-2A) Visa Program

18 Monday Jan 2016

Posted by in Food Security and Safety, Government, Immigration, Uncategorized

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With the run up to the 2016 presidential election, we have seen a growing debate on the need for border security versus the shortage of agriculture workers. Tales of apples rotting on trees and produce left in the field are offered as evidence of jobs Americans won’t do. Yet, according to the U.S. Department of Labor’s (DOL) Office of Foreign Labor Certification program, we have a record number of guest worker visa holders. In agriculture alone, the number of H-2A visa holders has risen nearly 35% in the past decade.

Visa Certifications

Considering the increase of H-2A visa holders, how is it those who grow our food are struggling to bring in their crops? Where are all the workers? Well, according to DOL reports, a majority are harvesting tobacco, working in landscape nurseries, and operating equipment. Annual reports show the tobacco industry is consistently the largest single sector employer of agriculture guest worker visa holders. In fact, a tobacco trade organization, the North Carolina Growers Association (NCGA), touts itself as the nation’s largest user of the H-2A agricultural “guest worker” program. And, though the Center for Disease Control (CDC) reports a steady decline in U.S. smokers, the industry is experiencing a growth in acres planted and yields.Visa Top 10

The resurgence comes after an initial dramatic decline in tobacco farming following the implementation of the Fair and Equitable Tobacco Reform Act of 2004 (FETRA). That legislation ended nearly 70 years of farm subsidies and marketing quotas. Then, beginning with the following year (2005), the feds stepped in with the Tobacco Transition Payment Program (TTPP). A program that paid nearly $9.6 billion to farmers for the lost value of their marketing quotas over a ten-year period. Also, with the low costs guest workers and the benefit of federal export assistance, the industry has gained a world of new consumers through exporting. For those health conscious consumers, tobacco now qualifies for certification under the USDA’s National Organic Program (NOP).

As well, according to a recent report by the Federal Trade Commission (FTC), in 2012, tobacco companies spent $9.6 billion marketing cigarettes and smokeless tobacco in the United States alone. An amount of about $26 million each day, or more than $1 million an hour. Not to mention federal funds at work to assist in identifying medicinal uses for tobacco.

It may appear the relationship between tobacco farming and the government makes no sense, but it actually makes an awful lot of cents. In 2014 alone, federal revenue from tobacco tax amounted to $15.56 billion dollars. Projections through 2020 show an anticipated $157.12 billion into government coffers (no pun intended). American tobacco farming is a windfall tax source for the federal government.

In summary, tens of thousands of agriculture guest workers are designated to work in tobacco while food products go unharvested. The government spends billions to burn food for fuel in its failed ethanol experiment. We have an unprecedented amount of illegal immigration due to a broken system. It goes to show, even a practical program, as is the H-2A visa, government involvement inevitably distorts the original intent.

– See more at: http://environmentblog.ncpa.org/tobacco-top-user-of-agriculture-guest-worker-h-2a-visa-program/#sthash.NEBzRYdh.dpuf

Illegal Minors: It’s Big Business!

13 Wednesday Jan 2016

Posted by in Agency, Government, Government Accountability Office (GAO), Illegal, Immigration, Office of Inspector General (OIG), Spending, Uncategorized

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BCFS

1,000’s Unaccompanied Illegal Minors and Millions of Dollars Delivered to Texas

The U.S. Department of Health and Human Services (HHS) Office of Refugee Resettlement (ORR) has facilitated the transfer of hundreds of Unaccompanied Alien Children (UAC) to Ellis and Rockwell Counties in Texas.  According to the U.S. Customs and Border Protection Service, a flood of nearly 10,600 minors has inundated the border in the past two months, shattering the already elevated numbers of the recent years, and overwhelming the U.S. Border Patrol.

Agency reports identify the UAC’s are majority male teenagers from countries other than Mexico.  County officials reported they received notice of the transfer late Tuesday, just one day prior to the arrival of the first bus.  Though public leaders voiced compassion for the children, many criticized the federal government for failing to provide adequate notice.

The Lakeview Camp and Retreat Center near Waxahachie, the Ellis County facility, is expected to house 500 minors and 200 support staff.  The Rockwell County site, Sabine Creek Ranch near Royce City, will accommodate 200 minors and 100 staff.  In a public letter, Jaroy Carpenter, Lakeview’s Executive Director, referenced the event as a “youth camp of orphaned children (ages 13-18) from South Central America.”

Sabine Creek Ranch (SCR) original written statement said they had not received a formal request to house the UACs.  However, the following day, December 11th, they revised their statement to say they will receive the minors. SCR also praised the leadership of BCFS Health and Human Services’ Emergency Management Division (BCFS-EMD), describing the organization as, “people you would really enjoy knowing and working with individually.” With that statement, it begs the question, “What is BCFS?”

BCFS Health and Human Services, (formerly Baptist Child & Family Services), is a Houston-based 501(c)(3), specializing in residential child care service to secure emergency shelter for abused and neglected children.  Recent financials show a 2015 operating budget of nearly $56.9 million for residential child care, $16.2 million for community-based service, and $119,890.00 for international services.  These are astounding numbers, but even more so when compared to the organization’s previous years.

UAC

In a 2014 letter to the Secretary of HHS, Senator Chuck Grassley pressed the department for answers regarding the funds provided to BCFS.  Grassley requested the department justify the outrages spending per child, and explain the nearly $450,000 salary for the non-profit’s Chief Executive Officer (CEO).  In addition, Grassley wanted answers to the lack of transparency for an organization that receives 95.9% of their revenue from public support.  But, BCFS is only one of many recipients of a massive financial windfall from the government’s new children’s program.

With its $3.7 billion budget and recent classification changes by the Obama Administration, the UAC program has created the incentive for illegal immigrants to make the harrowing trip from their homeland to the promise land.  Through HHS, the Administration has infused massive amounts of federal funds into organizations like BCFS.  As demonstrated by the above example of BCFS, funding for housing and care has burgeoned since 2011.  Also, the amended classification rules for a UAC creates a misleading image of kids making a solitary, dangerous journey.

According to program changes, a person younger than 18 years, not traveling with a verified parent or legal guardian, is to be documented as a UAC.  For example, a 17-year-old, traveling with a sibling, aunt, grandparent, or unverified parent, is classified as unaccompanied, although program rules require the minor to be housed with the accompanying family member, at a rate of 2 minors per adult.  To maintain the 2:1 ratio, the program provides paid attendants.  Additionally, if their home country is not Mexico or Canada, the minor may be eligible for refugee status.  They are then reclassified from an Unaccompanied Alien Child (UAC) to an Unaccompanied Refugee Minor (URM), at which point they may qualify for lifetime federal benefits.

There is no arguing the U.S. is compassionate and charitable.  As so, federal programs should provide aid when events warrant as opposed to creating humanitarian crises.  A more thorough consideration of the impact of such programs is crucial.  A true humanitarian, and cost effective approach to the migration would be to work with international agencies within the countries of exodus, as opposed to enticing their youth to leave.  Enhanced opportunities, education, and safety at home would alleviate the desire to embark on a perilous journey to an unknown future.

Organics: Another Fine Government Mess

12 Tuesday Jan 2016

Posted by in Food Security and Safety, Uncategorized

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usda-organicThe Organic Foods Production Act (OFPA), as part of the 1990 Farm Bill, established the National Organic Program (NOP). The program, as administered by the United States Department of Agriculture (USDA), oversees uniform standards governing the marketing of organically produced products. The NOP’s mission is to assure consumers of consistent organic standards of production and to facilitate the interstate commerce of organically produced food.

At the time of the NOP’s inception, the organic market for farm products had an estimated annual value of $1 billion.  By 2012, U.S. certified organic sales were at $28.4 billion and according to the USDA’s Economic Research Service (ERS), the sales for 2014 are estimated at $35 billion. It is clear that organic sales are showing significant growth, but at what costs?

The current Chipotle E. coli outbreak offers an opportunity for shoppers to understand the true nature of the USDA’s organic certification program. Numerous studies and public opinion polls find consumers overwhelmingly believe the higher priced, organically certified food is a healthier, safer choice.  However, experts, consumer groups, and scientific research do not support that view.

In one example, a 14-page letter dated October 8, 2015, by the Consumer Reports National Research Center details many of the failings of the NOP. The letter criticizes the National Organic Standards Board (NOSB) for approval of synthetic and non-organic nutrient additives and synthetic pesticide material, even in baby formulas. The letter states, “We support the proposal to remove nonylphenol ethoxylates (alkylphenol ethoxylates) or NPEs/APEs from the list of “inerts” allowed in organic production because of their toxic and endocrine-disrupting effects.”

The Consumer Reports letter demonstrates the discrepancy between what the NOP entails and what the public believes the program offers. The NOP outlines the rules and processes to create uniformity for organic labeling. Although there are restrictions and prohibitions of a variety of chemical applications, the program allows for many waivers and exemptions. Nowhere in the program does it suggest certification assures a safer or more nutritious food choice. In fact, Dr. Stuart Smyth, a food safety expert and agriculture biotechnology researcher, calls the National Organic Standards, “an illusion of food safety.” As Smyth explains, “These organic standards pertain to seed, fertilizer, and chemicals that are allowed to be used to produce a crop that will be certifiably organic when it is ready to be harvested. These production standards have absolutely nothing to do with increasing food safety.”

Still, the organic industry, as a marketing ploy, perpetuates the myth to consumers that organic certification implies safer foods. Moreover, with the ever-growing market share, one would assume conscientious shoppers increasingly prefer organic foods. Do they or is that another false assumption? What has changed in the past 15 years to drive the annual market value of organic food products from $1 billion to $35 billion if not consumer preference? How about the huge increase in consumer prices for the organic products, the increased volume of the labeled products, and the massive increase in program funding? To explain, let’s consider just some of the taxpayer dollars pumped into the NOP by means of the most recent farm bill, the 2014 Farm Act.

  • $20,000,000 for each fiscal year 2014 through 2018 for program operation
  • $5,000,000 to the Secretary of Agriculture for data collection and distribution to National Agriculture Statistics Service (NASS) and Agricultural Marketing Service (AMS).
  • $15,000,000 for each fiscal year 2014 through 2018 for modernization and technology upgrade
  • $5,000,000 upgrade collaboration with Commodity Credit Corporation (CCC).
  • $11,500,000 for each fiscal year 2014 through 2018 for cost-share programs with CCC.
  • $7,000,000 for each of the fiscal years 2014 through 2018 for natural products research.

In the above-designated funding commitments alone, the federal government will spend $277.5 million through the term of the current agriculture authorization bill. An astonishing amount, considering the original 1990 Organic Foods Production Act stipulated the program costs will be covered entirely by fees gleaned from the program’s participants.

The growth of the organic market follows the growth in federal dollars pumped into the program. Food safety is not improved. Consumers have no assurance they are purchasing a more nutritious product. Third party certifiers charge upwards of $3,000 to farmers for label use creating an incentive for fraud. Foreign products are certified outside of the U.S. by foreign agents with no USDA oversite. Contemporary farmers are at a competitive disadvantage as a result of the marketing, promotion, and price difference of organically labeled product. Organic foods can potentially be less safe than their uncertified counterpart. And, in the end, the taxpayers are again burdened with an unproductive, fraud-laden, market manipulating program that offers no demonstrative benefit.

– See more at: http://environmentblog.ncpa.org/organics-another-fine-government-mess/#sthash.SHfTXGlJ.dpuf