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State paid $85 million in Medicaid to people who didn't qualify, they want it back

The state health department may have paid as much as $85 million over 20 months for state Medicaid enrollees who didn't qualify.

NEW ORLEANS - Through a new audit, it's estimated up to $85 million has been misspent in the State Medicaid program for thousands of people. Eyewitness News talked with one New Orleanian who didn't even know she had it.

"I, at 38 years old have battled cancer twice and won," Mandy Schwalb said.

And if anyone knows how important health insurance is, it's Schwalb.

She talked to us shortly after speaking at a committee hearing in Baton Rouge, and the reason she's speaking out goes back to when she went to compare insurance through the federal marketplace as she was changing jobs and didn't want a gap.

"You know for that period of time income, I entered zero income for myself on the marketplace, at the end, it just said I was qualified for Medicaid, which I knew I was not qualified for Medicaid."

She also told us she never agreed to enroll, but somehow got signed up.

And now a legislative audit has revealed that's been an issue. The state health department may have paid as much as $85 million over 20 months for state Medicaid enrollees who didn't qualify. The report says the state's wage verification was faulty, relying on Medicaid recipients to report their own income, paycheck changes, and renewal.

"My first instinct was that it wasn't a state-mandated letter it was actually a scam."

Since receiving a letter earlier this year for Medicaid fraud, and being told to pay back over $5,000, Schwalb's fighting to clear her name. She recently talk with State Representative Tony Bacala of Prairieville and he's holding the Department of Health accountable.

"Evidence has been mounting that the Department of Health hasn't done a very good job of verifying income, which has allowed ineligible people to enroll in Medicaid at a cost to me and you of $5,000 per person, per year," he wrote in a message on Facebook.

Now as changes to verify and track income come along, Schwalb wants everyone to understand the scope of impact of what's happened.

"There's no reason for waste in this day and age, and I want to ensure that the people who really need the help get it."

Just this Wednesday, two days after the audit was released, the Louisiana Department of Health launched a new Medicaid enrollment system. It's expected to fix the faults of the previous one by using state and federal databases to verify income, disability, and lawful presence in the U.S.

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