Parents, lawmakers question FSSA explanation of nearly $1 billion Medicaid forecasting error, call for increased transparency

INDIANAPOLIS — Several parents, advocates and lawmakers are calling into question the Family and Social Service Administration’s explanation of what led to a nearly $1 billion Medicaid shortfall.

The FSSA presented its findings to the Medicaid Oversight Committee earlier this week, which mostly explained what the agency has changed to ensure this doesn’t happen again.

”We have created a review process to ensure that the right individuals are reviewing this data on a monthly basis to help us identify any trends of risk as early as possible,” FSSA CFO Paul Bowling said.

According to State Rep. Ed DeLaney (D-Indianapolis), the FSSA’s explanation is not specific enough.

”I don’t think they’ve given a satisfactory answer at all,” State Rep. DeLaney said. ”We need to know who made the error, we’ve never heard this, they’ve not given us any name, we need to understand the role of the actuary, the outside financial advisor.”

According to State Rep. DeLaney, no information was given about how long the FSSA knew about the error, how the error was discovered and if any disciplinary actions were taken.

”When did we discover it, and how did we discover it?” State Rep. DeLaney said. “Because if you can discover a mistake, that probably means you probably didn’t have to make it…this administration will not break the code of silence on how a billion-dollar error occurred.”

”[The FSSA] tried to walk it back around to really, ‘This is what we’re going to do going forward to prevent this from occurring again’, not really getting into the meat of why this happened in the first place,” Jennifer DeWitt with Indiana Families United for Care said. ”I did not hear anything that sounded like an explanation.”

”I don’t feel like they’re being transparent at all,” Evansville resident Daniele Johnson said.

Johnson said she cares for her disabled mother, and that she has no idea when her mother will be taken off what’s called the Pathways Waiver waitlist. The FSSA replaced the popular Aged & Disabled Waiver program with two separate waiver programs (Pathways being one of them) last month — a cost-cutting move the FSSA made in response to the nearly billion-dollar forecasting error.

”I just hope that they’re never put in this situation themselves,” Johnson said. “I wouldn’t wish it on my worst enemy.”

In a statement to FOX59/CBS4, the FSSA had this to say about what led to the shortfall:

“There was no single issue that led to the forecast variance presented in December 2023. The forecast variance was due to unanticipated increases in utilization and enrollment, reimbursement rates, and a lag in claims data that informed the forecast. This was first discussed in-depth with the State Budget Committee on Dec. 19, 2023, and that presentation is available for viewing on the State Budget Agency website.”

When asked about who was responsible for the error, who caught the error, how long the FSSA knew about the error, and if any disciplinary action was taken, the FSSA sent a follow-up statement:

“…[A]s there was no single issue that caused the forecast variance, but rather it was the result of several issues relating to rates, enrollment, utilization and timing of data, your questions do not apply. The variance was realized as the forecast was compiled, and the agency immediately went to work to study and address the causes and alert fiscal and legislative leadership.”

In March of this year, Senate President Pro Tem Rodric Bray made these remarks regarding the Medicaid shortfall shortly after the Senate adjourned:

“The FSSA folks found that problem, the person that was there and kinda running it has now, has left, and the person that came in found it—we appreciate the work that she has done and the information that she’s been able to give us…You take a look at Milliman, the company that did the forecasting for [FSSA], we’re taking a look at that and to make sure that we don’t have those problems again, and to make sure that they’re using up-to-date numbers. There was a fairly large lag between the numbers that they were using and the facts on the ground, so we’ll make sure that never happens again.”

Last session, State Rep. DeLaney successfully pushed for legislation to boost FSSA transparency in the House. However, the Senate ultimately passed a watered-down version of that legislation in a separate bill that included only a handful of the original amendments. Still, State Rep. DeLaney said he’s confident lawmakers will once again introduce similar legislation next session.

“I think it will get stronger…if it’s not enough, I won’t hesitate to crank it, turn it up, turn it down, do whatever needs to be done to make it more effective,” State Rep. DeLaney said.

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