BATON ROUGE, La. (AP) — Louisiana mistakenly paid nearly $1.9million for privatized Medicaid benefits for 1,727 people afterthey had died, according to an audit released Monday.

Legislative Auditor Daryl Purpera's office discovered the errorswhen it compared payments the state Department of Health andHospitals made for privatized Medicaid services in the 2012-13budget year, to lists of the deceased obtained through DHH's vitalrecords office.

The auditors found the department incorrectly paid $1.6 millionto the five managed care organizations that oversee medicalservices for Medicaid patients through a program called BayouHealth. DHH paid $258,000 to Magellan Health Services, the companymanaging addictive treatment and mental health services through theMedicaid program called the Louisiana Behavioral HealthPartnership.

"Approximately 53 percent of these payments were forparticipants who died before the programs began," the auditsays.

DHH Secretary Kathy Kliebert said the department will seekrepayment from the companies that were paid improperly and haschanged its method for crosschecking Medicaid enrollment, to ensurethat people are removed from the Medicaid rolls when they die.

"We are going to recoup 100 percent of this money," shesaid.

Both Bayou Health and the Behavioral Health Partnership startedin 2012, as Gov. Bobby Jindal's administration pushed to privatizemany state-run health care services.

In both programs, Louisiana's health department pays thecompanies monthly fees for overseeing the care of each Medicaidpatient, similar to an insurance premium or an administrative fee,depending on the type of health care involved. DHH decidesparticipant eligibility and enrollment, not the private companies,according to the audit.

"Based on the results of our analysis, DHH does not have asufficient process in place for identifying deceased Medicaidparticipants in a timely manner," the audit says.

In a written response to Purpera's office, Medicaid DirectorRuth Kennedy agreed with the report's findings, but noted that the$1.9 million overpayment "represents a tenth of one percent" of thetotal premiums paid per Medicaid patient per month during the auditperiod.

Kliebert blamed the payments on the state's reliance on theSocial Security Administration's "sloppy, faulty federal database"to determine Medicaid eligibility. She said DHH now will check itsMedicaid rolls against its own vital records office.

"By using our records, we feel much more comfortable that goingforward we're not going to have this issue," Kliebert said.

She said the health department will recoup all improperly paidfees to the private companies by February, by deducting it fromfuture payments. She said the companies weren't at fault, becauseenrollment is determined by DHH and management fees are based onthat.

"They weren't ripping us off. They weren't fraudulently billingus," Kliebert said.

About 1.4 million people are enrolled in Louisiana's Medicaidinsurance program for the poor, elderly and disabled, which isfinanced with a combination of state and federal funds. About900,000 of them receive medical care through the Bayou Healthprogram.