State Auditor Files Subpoena To Force DHSS Medicaid Applications Records

For three years, Delaware’s Department of Health and Social Services (DHSS) has been unable to demonstrate that it effectively screens Medicaid applicants for eligibility before approving or denying benefits, State Auditor Kathy McGuiness said today.

In releasing the 16 overall findings from Delaware’s annual Single Audit, McGuiness pointed out that five of them were repeat findings – and that all of the repeat findings involved federal programs administered by DHSS.

About the Single Audit

The State of Delaware Uniform Single Audit is performed annually. Each year, Delaware administers approximately $3.5 billion in federal assistance programs.

For fiscal year ended June 30, 2020, 14 federal programs administered by seven state agencies were examined. Included in the review were:

  • Department of Health and Social Services
  • Department of Education
  • Department of Transportation
  • Office of Management and Budget
  • Department of Labor
  • Department of Natural Resources and Environmental Control
  • Delaware National Guard

To read the full Single Audit report, click hereOpen this document with ReadSpeaker docReader.

“It is unconscionable that these failures continue to happen, especially within the Medicaid program, which serves such a vulnerable population,” McGuiness said. “Clearly, this is a problem that has existed for years – long before the COVID-19 pandemic, so that’s not a valid excuse for why these critical Medicaid reviews aren’t happening.”

Three of the five repeat findings involve DHSS’ Division of Medicaid and Medical Assistance (DMMA). The three findings involved DMMA not adequately verifying Medicaid benefits, not adequately verifying Medicaid provider eligibility, and not adequately verifying Medicaid provider health and safety standards.

“After years of seeing DHSS and DMMA have the same failing results in the Single Audit, I decided to take further action,” McGuiness said. “I want to determine exactly why DMMA is not properly doing its job overseeing the spending of Medicaid dollars.

“So in May 2021, I began a separate performance audit specifically of Medicaid eligibility and how recipients were being screened for program acceptance.”

However, DHSS officials have pushed back against McGuiness’s expanded audit of the Medicaid program, refusing to provide all of the information the auditor’s team needs to be able to fully comprehend how the program works and how many people have been erroneously denied Medicaid benefits or erroneously approved for them.

“What I am seeking is access to information that ultimately results in how state tax dollars are spent on Medicaid,” McGuiness said. “Delaware Code clearly gives me the authority to do this, yet DHSS officials have refused to provide my team with full access.”

After three months of non-cooperation by DHSS officials, McGuiness exercised the subpoena power given to her under the Delaware Code to force DHSS officials to produce the requested documentation and access. DHSS’ attorneys then filed a motion to quash McGuiness’s subpoena, which a judge signed Aug. 4.

What Delaware Code says

Delaware Code Title 29 Chapter 29 lays out the State Auditor’s authority to audit all entities that expend state funds. Specifically, § 2907(a) states:

“(a) The audits shall be sufficiently comprehensive to provide, but not limited to, assurance that reasonable efforts have been made to collect all moneys due the State, that all moneys collected or received by any employee or official have been deposited to the credit of the State and that all expenditures have been legal and proper and made only for the purposes contemplated in the funding acts or other pertinent regulations.”

In addition, § 2910 lays out the auditor’s authority to subpoena documents:

“(a) In connection with other powers of the Auditor of Accounts, the Auditor shall have the power to administer oaths and compel the attendance of witnesses and the production of documents by the filing of a praecipe for a subpoena with the Prothonotary of any county of this State.

(b) A subpoena issued under this section shall be effective throughout this State.”

“Instead of complying with the subpoena, DHSS has instead decided to further waste taxpayer dollars by arguing with me on this issue,” McGuiness said. “I am seeking access to information that affects how state taxpayers’ money is being spent, which is clearly in my job description, yet DHSS wants to fight over this in court instead of simply producing the records.”

McGuiness is prepared to appear in person in Superior Court to fight for access to the DMMA records and documentation she requested four months ago. A hearing date has yet to be finalized.

“What does DHSS have to hide regarding its Medicaid program performance?” McGuiness said. “After three years of Single Audit findings, it’s obvious that DMMA could use an in-depth, outside perspective on how it could improve its operations.

“My role as the state auditor is to act as a fiscal watchdog for all Delawareans, and part of that role includes providing recommendations for greater accuracy, efficiency and economy – which is what I’d like to do here for DHSS.”