Auditors release Performance Audit data for Medicaid State Agency

Pago Pago, AMERICAN SAMOA — Following a Performance Audit of the American Samoa Medicaid State Agency — commonly referred to as the ASG Medicaid Office —  for the three fiscal years ending September 30, 2022, the Territorial Audit Office (TAO) identified eight “key deficiencies in the specific areas audited” of the Medicaid Agency, which comes under the purview of the Governor’s Office.

The audit report included 17 recommendations to address the deficiencies, according the May 16, 2023 cover letter signed by Acting Territorial Auditor, Morina Jo Fa’asisila and Chief Auditor, Mike Edmonds to Gov. Lemanu P.S Mauga. 

In its written response, which is incorporated into the audit report, the Medicaid office has agreed to implement all 17 of these recommendations, according to the cover letter, which notes that this is the first audit of the Medicaid Agency conducted by TAO, which plans “to focus future audits on the Agency's administration of the Medicaid Program in American Samoa.”

TAO explained that the objective of the completed performance audit — for Fiscal Years ending Sept. 30, 2020, 2021 and 2022 — was to determine whether the American Samoa Government established a Medicaid Coordinating Council in accordance with an Executive Order issued in 2011.

Additionally, the audit assessed various management controls to ensure the Agency is operating effectively, efficiently, and in accordance with American Samoa laws, regulations, and sound business practices.

Top of the list of the key findings by TAO is the 2011 Executive Order, issued by the governor at the time, which established the Medicaid Agency. And this same order approved in principle the appointment of a Medicaid Coordinating Council to ensure compliance and accountability for all the work done within the Medicaid Agency programs and to assist monitoring and reporting on the overall progress towards achieving Medicaid Agency goals and/ or delivering programs.

During the audit, TAO said it confirmed that ASG has not established a coordinating council as required by the order of 2011. TAO contends that the “non-compliance” with the executive order “increases the risk of [Medicaid] Agency program(s) deviating from U.S. law and regulations and other related ASG Acts such as Patient Protection and Affordable Care Act and the Health Care andEducation Act of 2010”.

“Our discussions with the auditees confirmed that the Agency is aware of the requirements of the [executive] order but further research into the provisions of the EO is necessary,” said TAO, adding that the provisions in the order need to consider the potential impacts of conflict of interest, good governance, accountability and transparency.

TAO noted that the order requires that representatives from LBJ Medical Center and the Health Department become part of the Medicaid Coordinating Council.

The TAO auditors point out that the Medicaid Agency is created under the Office of the Governor and therefore reminded of its obligations to comply with standing executive orders as issued and approved by the Governor/ Office of the Governor.

“We acknowledge the work completed by Agency during multi-agency efforts to combat COVID-19,” said TAO and recommend that Medicaid Agency management finalize its review of the provisions in the 2011 Executive Order and proceed with ways to strengthen the oversight role and governance of Agency operations for improved service delivery for the people of American Samoa.

In its response, the management agrees that the Executive Order for the Medicaid State Agency needs to be updated. Medicaid further explains that the current Executive Order (EO) signed in 2011 is not officially a part of the Medicaid State Plan and a number of provisions conflict with federal Medicaid rules.

Medicaid management recommends that the 2011 order be updated to comply with federal Medicaid rules. Further, much has changed with the Medicaid program and a new order needs to reflect the expansion of the Medicaid program — due to the fact that the 2011 order was written when there was only one Medicaid provider.

“The Medicaid program has evolved significantly since 2017 when it first added new Medicaid providers, to warrant a new Executive Order that reflects the increased role of Medicaid in the expansion of services into the private sector and off-island,” according to the management’s response in the report.

Furthermore Medicaid will draft and submit to the Governor a proposed new order within 90 days of this audit.

INADEQUATE ORGANIZATIONAL CHART

The second key deficiency identified by TAO is that the latest updated Organizational chart provided by the Medicaid Agency does not reflect the actual roles and positions that currently exist within the agency.

At this time, the Medicaid Agency has a number of vacant positions within its approved organizational chart, according to TAO.

TAO pointed out that, the existing structure has staff working in multiple roles and/ or having to work beyond normal working hours resulting in overtime payments and other administrative issues. Further review on the activities performed by staff found that the delays in implementing the proposed roles in the organization chart can impact staff performances, leading to inefficiencies and delays in performing key tasks.

According to discussions with the Medicaid Agency, the delay in formally adopting the proposed organizational chart was due to competing priorities, structural change endorsement from relevant ASG department and shortage of staff to help with the implementation of activities.

TAO recommends:

• Director and management need to revisit its organizational structure and properly align it to the current needs of the Agency, to ensure that the right number of staff are employed to carry out the functions of the agency.

• Agency coordinate and seek advice and approval from ASG Human Resources Department and Treasury Department/ Budget Office to ensure the proposed changes are within government guidelines and regulations for such matters.

In its response, Medicaid management agrees with the need to update its organizational chart. The agency's chart has been a work in progress over the past several years as the Medicaid agency continually expands and changes.

The Medicaid organizational chart is a federal requirement that must be included in the Medicaid State Plan. Amending the Medicaid State Plan is a highly rigorous and technical process so the update on the organizational chart has been withheld until such time as the Medicaid program's expansion and operational structure was more clearly defined to sustain long-term sustainability.

According to the agency’s response, the Medicaid office has undergone significant programmatic, administrative and funding changes since the program expanded to implement the off-island medical referral program and add new providers and services outside of LBJ. ASG does review annually the Medicaid chart during the budget hearings.

TAO auditors were informed that Medicaid regularly submits a functional organizational chart annually to the Budget Office during the budget cycle and works with Human Resources on changing personnel needs.

“With expanded providers, services, increase in personnel, restructuring of the agency and clearer insight into the future development of the Medicaid program,” the Medicaid Agency said it is  Agency is ready to submit to the U.S Centers for Medicaid and Medicare (CMS) through the State Planning Amendment (SPA) process.

“This SPA will reflect a more clear and relevant organizational chart that reflects the current needs and future growth of the office and responsibilities to beneficiaries, providers, local and federal government,” Medicaid said.

Samoa News will report in future edition on other findings and recommendations by TAO.