Auditor General Jack Wagner Says He Stands By Results Showing Double-Digit Medicaid Error Rates

Dec 20, 2010, 16:55 ET from Pennsylvania Department of the Auditor General

HARRISBURG, Pa., Dec. 20, 2010 /PRNewswire-USNewswire/ -- Auditor General Jack Wagner said today that he stood by the Department of the Auditor General's finding of double-digit error rates in Pennsylvania's Medicaid program, and cast doubt on a federal report that coincided with the commonwealth's claim that the program's error rate was only 4 percent.

"I firmly stand by our audited error rate of at least 10 percent, which, if corrected, would save Pennsylvania taxpayers at least $436 million a year," Wagner said. "The federal report is based on information provided to the U.S. government by those claiming a lower rate. We have serious concerns about the methodology used in issuing this report.

"There is a serious problem, both nationally and in Pennsylvania, relating to waste, fraud and abuse in the Medicaid system. Corrective measures are needed to make sure that medical assistance is available for those who truly need help, but I remain concerned that those who manipulate the system are permitted to do as a result of those who manage the system by not putting proper checks and balances in place."

Wagner announced in November that his department had completed eligibility audits at all of the commonwealth's county assistance offices and found an average error rate of 15.5 percent. Auditors found error rates as high as 52.7 percent.

Wagner's auditors found errors in 2,141 of 13,789 of Medicaid cases selected randomly from the 595,046 total cases at the commonwealth's county assistance offices in all 67 counties.

Wagner said that his auditors randomly sampled cases in all 88 county assistance offices which administer benefits such as cash assistance, food stamps, and Medicaid benefits to needy Pennsylvanians.

For each case selected in the sample, auditors tested certain aspects of eligibility to determine compliance with Department of Public Welfare regulations, governing laws and administrative policies.  The criteria used to test the cases in the sample included the Medicaid Eligibility Handbook, the Income Eligibility Verification System, and the Client Information System Manual.

"We follow strict criteria in conducting these audits so taxpayers can be assured that our results are accurate," Wagner said.

Auditor General Jack Wagner is responsible for ensuring that all state money is spent legally and properly.  He is the commonwealth's elected independent fiscal watchdog, conducting financial audits, performance audits and special investigations.  The Department of the Auditor General conducts more than 5,000 audits per year.  To learn more about the Department of the Auditor General, taxpayers are encouraged to visit the department's website at

SOURCE Pennsylvania Department of the Auditor General