The state's Medicaid program needs to do a better job of investigating fraud and abuse to prevent the waste of taxpayer dollars, the Auditor General's Office reported Tuesday.
The examination found that the Arizona Health Care Cost Containment System simply puts off looking into many cases that it cannot immediately investigate. The result is that some of these cases are not even opened for a year or more after there has been an allegation of fraud or abuse.
And even once these cases are actually opened, one in four took at least another six months to resolve.
The issue involves two kinds of cases.
In one, the state seeks to reclaim money paid erroneously because of outright fraud or by abuse by either health care providers or those covered by AHCCCS.
The other category is in the area of cost savings, discontinuing benefits for patients who are receiving Medicaid benefits because of fraud, as well as preventing ineligible applicants from receiving government-paid health care in the first place.
Dot Reinhard, manager of the performance audit division of the state Auditor General's Office said the problem has been the inability of the agency to set priorities, especially if its Office of Inspector General lacks sufficient staff to look into all the complaints and referrals.
"We made recommendations for having them develop some formalized guidelines for whether they should immediately begin their investigation, close out a case, or defer it for a later time,'' she said.
Reinhard said that means focusing efforts on the cases that have the best chance of being resolved -- and where the state is likely to recoup some money -- and simply closing cases that are not likely to result in any cost savings or recovery.
The report said this is important because many cases just will never be resolved. That is borne out by a review of cases closed last year: About two thirds of the cases looking into fraud by AHCCCS providers resulted in neither criminal prosecution nor a even a civil settlement.
Setting priorities, the report says, will allow staffers to focus on the complaints and reports with the most likelihood of saving money for taxpayers.
How much could be generated is unclear: Reinhard said the purpose of the examination was to look at how AHCCCS handles its investigations, not to identify money that could have been recovered.
AHCCCS deputy director Monica Coury said work is underway to achieve better results.
"We have prioritized our efforts in fraud, waste and abuse detection prevention, even despite the recession,'' she said. "In fact, where we have had to make a staffing decrease of 30 percent during this recession we managed to find a way to increase our positions to our office of the inspector general over the past few years.''
The agency claims existing programs saved nearly $17 million this past budget year.