Court: State auditor can continue Medicaid probe

Department of Health and Social Services motion to quash subpoena denied
August 11, 2022

State Auditor Kathleen McGuiness’ attempt to audit Delaware’s Medicaid eligibility program scored a win following an Aug. 10 court ruling.

In an order filed by Superior Court Judge Craig Karsnitz, a motion by the Delaware Department of Health and Social Services to quash the Office of Auditor of Accounts’ subpoena for Medicaid information was denied. 

“At the heart of the instant dispute are DHSS’s and OAOA’s different understanding of OAOA’s powers,” Karsnitz wrote in his opinion.

In May 2021, the auditor’s office attempted to conduct a performance audit of Delaware’s Medicaid program to determine whether DHSS’s Division of Medicaid and Medical Assistance is complying with federal and state requirements, has effective internal controls, and incorporates data integrity throughout the program.

DHSS responded by questioning the auditor’s office authority to conduct a performance audit on Medicaid eligibility, and whether information on Medicaid participants can be shared.

A back-and-forth exchange between the two groups continued until August 2021, when the auditor’s office was granted a subpoena for Medicaid documents. DHSS’s motion to quash the subpoena followed about two weeks later.

The two sides presented their cases in November 2021, at which time McGuiness said her office was not seeking the entire Medicaid database, but income information would be needed to determine the eligibility of Medicaid recipients. An independent audit presented during the hearing found DHSS’s Medicaid program did not consistently follow procedures to determine and monitor provider eligibility. The audit also found the program is unable to support provider eligibility, which may result in unallowed costs.

McGuiness said she was pleased with the judge’s decision allowing her office to proceed with the performance audit. “We’re working on it right now,” she said.

Ideally, she said, she hopes to have the audit completed in six months, but there are unknowns that could extend the deadline.


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