Indiana Medicaid Scandal: $56M Improper Payments
Federal Audit Uncovers Massive Payment Irregularities
A damning audit from the U.S. Office of the Inspector General has revealed that Indiana made improper fee-for-service Medicaid payments totaling at least $56 million. The comprehensive 45-page report scrutinizes Indiana’s Applied Behavioral Analysis (ABA) payments, exposing widespread non-compliance with State and Federal guidelines.
Unprecedented Growth in ABA Therapy Spending
Indiana’s Medicaid spending on ABA therapy witnessed an astronomical increase from $14 million in 2017 to $102 million in 2020, securing the second-highest spending rate nationwide. This dramatic surge raised significant red flags among federal investigators.
Financial Impact and Federal Involvement
The audit identified $56.5 million in confirmed improper payments, with an additional $76.7 million labeled as “potentially improper.” Of particular concern, $39.4 million of these questionable payments originated from federal government funds, prompting demands for repayment.
Critical Documentation and Service Issues
The investigation uncovered several serious deficiencies in the payment system, including:
- Widespread incomplete documentation of services
- Insufficient evidence for provided treatments
- Inappropriate billing for non-therapy activities
- Employment of uncredentialed service providers
- Services rendered without proper medical referrals
Political Response and Call for Reform
Indiana Senate Minority Leader Shelli Yoder (D-Bloomington) has emerged as a vocal advocate for immediate systemic changes. As an incoming ranking member of the Health and Provider Services Committee, she emphasizes the critical need for enhanced accountability in healthcare resource allocation.
Impact on Vulnerable Communities
“When Medicaid payments go unchecked, it’s the families who rely on these services that suffer the most,” Yoder stated, highlighting the human cost of financial mismanagement. She stressed that every misallocated dollar represents a lost opportunity to provide essential care to Indiana’s children.
Future Actions and Leadership Changes
The Family and Social Services Administration (FSSA) faces pressure to implement swift reforms, including recovering improper payments and strengthening payment verification processes. In a related development, Indiana Medicaid Director Cora Steinmetz announced her resignation, effective early 2025, shortly after the audit’s publication.
