Fake News and Dishonest Arithmetic

A week after The Bayou Brief reported that Louisiana State Sen. Sharon Hewitt (R- Slidell) had deceptively edited the video record of state legislative auditor Daryl Purpera’s public testimony to the Senate Finance Committee, removing a critical 12-seconds of footage and sharing the altered recording with her online followers, Hewitt continues to push a fake news story that Medicaid beneficiary fraud is “widespread” in Louisiana and costs the state nearly a half a billion dollars a year.

Yesterday, she repeated her assertions in an article published by Watchdog.org, a well-known propaganda arm of the Franklin Center for Government Integrity, a far-right, anti-science organization funded by the petrochemical industry and loosely affiliated with the Koch brothers’ group Americans for Prosperity and the American Legislative Exchange Council (better known as ALEC).

Hewitt promoted the paid content, which was written by John Haughey, a freelance blogger from Florida and long-time contributor to the publication Outdoor Life, on social media.

Disappointed that #lagov has chosen to threaten the security of 37,000 elderly & nursing home patients rather than actively investigating Medicaid fraud within the 1.6 M participants. #LaLege https://t.co/1uKtpuF8pY — Sharon Hewitt (@sharonhewitt) May 8, 2018

And if you were to take the senator at her word, you’d probably think she had just ingeniously uncovered the panacea for all of the state’s budgetary woes.

All we need to do is “actively investigate” 1.6 million people (or nearly 35% of the entire state population) for suspected Medicaid fraud.

“Hewitt said the legislative auditor’s office estimates the state could save about $480 million in removing ineligible people from Medicaid’s rolls,” Haughey writes. “That would, essentially, restore the $431 million in LDH cuts in the proposed budget, which would mean an additional $1.6 billion or more in federal matching dollars.”

It’s complete hogwash.

As anyone with a working knowledge of Medicaid can tell you, Hewitt reveals a fundamental misapprehension of how federal matching dollars operate and interact with state discretionary spending.

This has nothing to do with the fiscal cliff.

Contrary to Sen. Hewitt’s assertions, Gov. John Bel Edward’s decision to avail the state access to federal funding for Medicaid expansion has been a wild success, creating more than 19,000 jobs, generating $178 million in state and local taxes, and resulting in a $3.5 billion economic impact, according to a recent, independent economic analysis conducted by three LSU professors.

The program is also wildly popular, supported by 69% of all citizens. Only among Republicans is the program narrowly unpopular, dropping from 51% approval in 2017 to 47% during the first few months of 2018.

But more importantly, Medicaid expansion has increased access to health care for nearly half a million people and reduced the state’s uninsured rate from 16.6% to 10.3%.

If there was any factual basis to Sen. Hewitt’s claims, it would be a blockbuster story.

Instead, though, it is a prime example of the cynical partisanship and dishonest arithmetic that continues to place the state’s finances on the brink of insolvency.

It should be obvious that any budgetary solution involving criminally investigating more than a third of the state’s citizens is patently absurd and unserious.

Yet this is where Louisiana currently finds itself.

Later in this report, we unpack the precise ways in which Sen. Hewitt and some of her Republican colleagues have manufactured a fake news story about widespread Medicaid beneficiary fraud, but in order to appreciate the larger political context, it’s important to remember a sordid story from the not-so-distant past.

The Curious Case of Bruce Greenstein

In one of his very first actions as attorney general of Louisiana, Jeff Landry dropped the most significant criminal case against a state public official since the the FBI found $90,000 in cold cash in Congressman Bill Jefferson’s freezer.

Bruce Greenstein, the former secretary of Louisiana’s Department of Health and Hospitals, had faced nine counts of criminal perjury for allegedly lying to members of the legislature about his efforts to improperly award a $200 million contract to his former employer, Client Network Services Incorporated (or CNSI).

In 2014, after an exhaustive, eighteen-month-long inquiry, a grand jury decided to indict Greenstein, who was appointed to the position four years prior by then-Gov. Bobby Jindal.

The contract in question, ironically enough, was about identifying Medicaid fraud and had been necessitated by changes enacted under the Affordable Care and Patient Provider Act (also known as Obamacare), which mandated states to suspend payments to “a provider when it determines that there is a credible allegation of fraud.”

To be sure, there is absolutely no evidence nor was there ever any suggestion that CNSI itself engaged in anything illegal, and in fact, the company had subsequently sued the state of Louisiana for breach of contract. But there were thousands of text messages and hundreds of e-mails that had built a strong case against Greenstein.

And Jeff Landry waited only three months after he took over as attorney general to drop that case.

Today, Bruce Greenstein is serving as the Trump administration’s Chief Technology Officer for the Department of Health and Human Services.

Given Landry’s newly-found interest in pursuing Medicaid fraud and the coordinated, hair-brained, propaganda campaign by his Republican colleagues in the state legislature to “actively investigate” 1.6 million Medicaid recipients for potential fraud, it’s worth remembering how easily and how quickly these same elected and appointed public officials had been willing to overlook and overturn a grand jury’s decision to criminally indict a man accused of repeatedly lying about how he facilitated a $200 million state Medicaid contract with his former colleagues.

There’s another reason it’s important to remember the rise and fall and then the fall and rise of Bruce Greenstein: We are often willing to overlook abuses of corporate welfare but more than happy to stigmatize those most in need and most deserving of public support.

Medicaid fraud is almost exclusively committed by providers. Medicaid beneficiary fraud, therefore, is more accurately defined as eligibility error.

Unlike other government entitlements and earned benefits, Medicaid recipients do not receive a fungible product.

Your Medicaid card cannot be used like a credit card or bartered away to someone else.

“The Medicaid program makes zero payments directly to recipients. Zero,” Jen Steele, Louisiana’s Medicaid director, recently explained in a letter to The Advocate.

Given the misinformation about beneficiary fraud being peddled by Republican state legislators, it’s a simple, incontrovertible fact about the program that is worth underlining in black ink: Providers are the only people who actually make money from Medicaid.

Last year, Gov. Edwards created the Task Force on Coordination of Medicaid Fraud Detection and Prevention Initiatives, and charged members with five simple priorities, as outlined in the 2017 Regular Session (see Appendix A for Act 420 of the 2017 Legislative Session):