OIG Finds Low Physician Compliance with Primary Care Grant Rules

Federal auditors want the state of Louisiana to pay back $13.6 million that may have been improperly paid to primary care physicians to bolster rural healthcare in the years after Hurricane Katrina.

The audit of the Louisiana Department of Health and Hospitals Bureau of Primary Care & Rural Health found widespread noncompliance with the terms of a $50 million Professional Workforce Supply Grant.

The grant offered one-time payments to physicians that could be used for practice-related expenses, including paying off student loans, offsetting malpractice premiums, and relocation expenses. The incentives were designed to entice them to practice medicine for at least three years in greater New Orleans area in the years after the catastrophic August 2005 hurricane.

The Office of Inspector General review, however, found that many physicians did not complete the terms of their three-year contracts, were working at ineligible sites, did not work full time, and in at least one instance, may not have even practiced medicine.

A sample review by the Department of Health and Human Services' Office of the Inspector General of 100 practitioners who received grant money found that only 33 of the physicians were in compliance with the requirements of the federal grant.

The 67 who were not in compliance received more than $3.1 million.

Based on that sample, OIG estimated that from March 2007, through January 2009 the Bureau of Primary Care & Rural Health paid at least $13.6 million of federal grant funds to an estimated 509 practitioners who were not in compliance with the grant requirements.

"These errors occurred because the bureau did not follow its existing policies and procedures or did not have adequate policies and procedures to ensure that its contracts with practitioners obligated them to meet the 3-year service requirements, that practitioners were monitored for compliance with the Federal grant requirements, and that corrective action was taken for practitioners not in compliance," OIG said in the audit.

OIG recommended that Louisiana refund to the federal Centers for Medicare and Medicaid Services the more than $13.6 million paid for noncompliant grants, implement adequate safeguards to prevent a further occurrence, and take corrective action against physicians who were noncompliant after the audit period. 

In a written response to the OIG findings, Gerrelda Davis, director of the Bureau of Primary Care & Rural Health, attributed much of the problem to "human error" a small staff, and the sheer workload in the months after the hurricane. "Due to the large amount of contracts being completed during that time frame, Bureau staff responsible for completing contracts was as diligent as possible with the limited number of staff assigned to process contracts," Davis said.