One of the more surprising facts that emerged from a Sept. 17 virtual seminar co-hosted by LDI and the Tradeoffs podcast is that, despite how often the topic is discussed and debated in government and regulatory circles, no one actually knows the total amount of money being lost to fraud in Medicaid.
Titled “Decoding the Moment: States Weigh in on Medicaid Fraud,” the University of Pennsylvania event featured Medicaid executives from New York, Nebraska, and Massachusetts; Penn Medicaid researcher and LDI Senior Fellow Paula Chatterjee, MD, MPH; and Dan Gorenstein, Founding Executive Director of Tradeoffs, who served as moderator.
The Medicaid officials were Amir Bassiri, MSW, Medical Director of the New York State Department of Health; Drew Gonshorowski, MS, Former Medical Director of the Division…
PAYROLL & HR CONTROLS (PREVENTING “GHOST” SCHEMES)
Payroll fraud is often the hardest to detect because it “looks” like a normal business expense.
- Segregation of Duties (SoD): The person who adds new employees to the system must not be the same person who approves the monthly pay run.
- Mandatory Vacation Policy: Require all financial and HR staff to take 5–10 consecutive days of leave annually. Fraud often surfaces when the perpetrator isn’t there to “hide” the trail.
- Ghost Employee Audit: Perform a quarterly “Headcount Reconciliation” where managers must physically verify every name on their payroll list exists.
- Self-Pay Blocking: Ensure the payroll software has a hard-coded block preventing administrators from editing their own salary or bank details.