Mike Terry, Deseret News
Due to budgetary debates in congress where Medicaid appears to be an option for a possible cut, Adapt / Utah and the Disabled Rights Action Committe represent Utahns who benefit from Medicaid in the state capitol rotunda in Salt Lake City on Monday, Sept. 12, 2011.

While it's hard to argue for the creation of another government agency, it's easy to applaud the work of the new inspector general's office in the Utah Medicaid bureaucracy — if only on the basis of a simple cost-benefit analysis.

In the first year of its creation, the office has recouped nearly $8 million in faulty billings — a nice return on the initial investment. And the prospect of a continuing stream of additional funds from a vigorous monitoring of waste and fraud makes the investment even more satisfactory.

The work of Inspector General Lee Wyckoff and his staff is the byproduct of a concerted effort in Utah to get the state's arms wrapped around the cumbersome morass of transactions involving state-managed Medicaid services. On top of the $8 million already recovered, another $17.6 million in billings is under review.

It's a classic good news, bad news situation — gratifying on one hand to know money is coming back into the system; aggravating on the other to find the system is replete with sketchy billing practices. One wonders just how many dollars have heretofore fallen through what are apparently some pretty wide cracks.

If nothing else, Wyckoff's experience demonstrates the depth of the problem in the administration of Medicaid-related services. Until now, there has been limited recourse against wasteful expenditures, like the use of ambulances to transfer patients between facilities and the practice of accepting visitors to emergency rooms for non-emergency care.

The Legislature last year also passed significant legislation to move Medicaid patients into a system more akin to managed care than a fee for service system. Under the reform plan, patients and providers will have incentives to more properly plot out the course of treatment and, in theory, reduce the number of duplicative or unnecessary services.

The plan is expected to save $770 million over a seven-year period and will seek to cap annual growth in Medicaid expenditures to no more than 8 percent. The approach is intelligent and innovative and is being watched nationally to see if it achieves its expected success.

That reform effort has something critical in common with the work of Wyckoff. Both are aimed at bringing a sense of accountability to the system. Under a managed-care approach, patients will be engaged in the process of coordinating treatment plans. They will work with principal care providers to plan out a course of treatment within a range of costs. Under the current system, patients have no means or incentive to hold down expenses; they may simply show up for treatment and expect the state to pick up the tab.

By scrutinizing the billing records of providers, Wyckoff is sending the message that reimbursement is not automatic. In theory, providers will adapt their behavior to better ensure they are submitting accurate billings, in order to avoid having to cough up money later.

As it has grown, Medicaid has brought frustrations to every side of the equation. Patients don't always get the treatment they want; providers are often underpaid and overburdened by excessive paperwork; and taxpayers are on the hook for costs that have been growing at a rate that threatens to overwhelm the state budget.

The costs of these recent reform efforts and the creation of the inspector general's office are tiny in comparison to what they may yield in savings, and that, in the context of public policy, is simply good medicine.