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California Overcharged Medicaid by $20.3 Million in 2010

19 Tuesday Jan 2016

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

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California, Government Waste, Medicaid, OIG

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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Illegal Minors: It’s Big Business!

13 Wednesday Jan 2016

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

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BCFS, Border, Illegal Immigration, Texas, Unaccompanied Alien Children

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.

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Benificiary of Billion Dollar Green Fuels Program Files for Creditor Protection

01 Tuesday Dec 2015

Posted by Belinda Silva in Energy & Environment, Ethanol, Government, Renewable Fuels Mandates, Spending, Uncategorized

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Abengoa, Bankruptcy, Biofuels, Cellulosic, Fraud & Abuse, Government, Government Waste, RFS, Subsidies

The Environmental Protection Agency (EPA) has released its final ruling on blend volumes of renewable fuels for the calendar years 2014, 2015 and 2016. The challenge for the EPA is the lack of advanced biofuels to meet obligated minimum levels. The Energy Independence and Security Act of 2007 (EISA), mandates an increasing blend of renewable products into our domestic fuel supply. The Renewable Fuel Standards (RFS) provisions require non-food based cellulosic biofuels to be increasingly introduced into commercial gasoline. Called “2nd generation”, cellulosic ethanol, unlike 1st generation corn-ethanol, is derived from wood chips, grasses, co
rn cobs and other biological material.

The problem is the congressionally mandated product is simply nonexistent. Industry discussions, analytical reviews, and organizational rationalizations toss out phrases such as immature technology, steep learning curve, and of course more federal funding. The issue is complicated, yet, not cAbengoa5omplicated.

Producing 1st generation ethanol is much simpler than taking a cellulosic material and transforming it into a viable fuel source suitable for commercial use. Of course, we all knew this going into the program. Unfortunately, after pouring billions of dollars into this boondoggle we have done nothing more than successfully proven cellulosic ethanol is not a practical endeavor.

Even more so, with one of only four cellulosic ethanol production plants possibly set to shut its doors, Abengoa, a Spain-based sustainable energy development company, has filed for creditor protection one day before Thanksgiving, and less than a week before the EPA is expected to release the blend levels of renewable fuels. After the U.S. taxpayers invested billions of dollars towards the building of a massive biofuel facility, not to mention the world’s largest solar farm and wind farms, the company is teetering like a giant, green energy Jenga tower.

Abengoa is an international, mega-corporation founded in 1941. Its near certain investment losses to taxpayers’ dwarfs those of the Solyndra fiasco. Aside from perks and discounts for federal land use, employment credits and special tax incentives a quick search discloses only some of the federal dollars pumped into Abengoa and yet we still have no 2nd stage biofuels to meet program goals.

  • $1.45 billion loan guarantee to Abengoa Solar, Inc. for construction and the start-up of solar energy plant in Solana, AZ — 2010
  • $1.2 billion loan guarantee to Mohave Solar, LLC. for the construction & start-up of Mohave Solar Project plant in San Bernardino County, CA. — 2011
  • $133.9 million loan guarantee for biofuel plant Hugoton, KS — Department of Energy – 2011
  • $97 million federal grant, Hugoton, KS — Department of Energy — 2011
  • $4.03 million in grants and federal contracts for 2015 alone

Beyond the amounts presented here, millions more U.S. dollars have rolled into Abengoa and its many subsidiaries. With its announcement in Spain yesterday and today being Thanksgiving, American stock values for the company have not yet reacted. The protection filing gives the company four months to find a solution before creditors can force a full bankruptcy. But, many employees of U.S.-based projects may still be unaware.

It is likely by the end of next week, Abengoa will be a household name. The failure of Abengoa, along with the failure of the Renewable Fuels Standard program, will hit jobs, stock values, the banks and the federal budget. All this, and we still have no cellulosic ethanol to meet the mandates of the Renewable Fuels Standard.

– See more at: http://environmentblog.ncpa.org/beneficiary-of-billion-dollar-green-fuels-program-files-for-creditor-protection/#sthash.qohzKCLr.dpuf

Original publication date: November 30, 2016

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