Programs have success in targeting Medicaid fraud
Programs have success in targeting Medicaid fraud
Detecting and identifying Medicaid fraud and abuse always has been a concern and challenge for states, but with some states looking at reducing administrative burdens for providers, the door to increased fraud could be unintentionally opened.
Stan Rosenstein, principal advisor of Health Management Associates in Sacramento, CA, and former director of California's Medicaid program, says "there is an important balance" that states need to address, between eliminating requirements and protecting against opening the program up to greater fraud.
"Unfortunately, there is always an unscrupulous part of the program, a very small percentage, that will take advantage," he adds. "States will need to have the proper controls in place to avoid opening up the program to widespread fraud."
Variety of methods used
Through its Provider Audit and Investigations Units within the Office of Payment Accuracy and Recovery (OPAR), Oregon's Department of Human Services (DHS) actively works to identify providers and recipients who intentionally attempt to defraud the Medicaid system.
"The department utilizes a wide variety of methods and techniques to identify Medicaid fraud and abuse conducted by both providers and those who receive Medicaid services," says Trisha Baxter, OPAR's administrator.
"One challenge somewhat unique to Oregon is that it does not currently have specific false claim statutes that replicate and dovetail with the federal False Claim Act," she says. Because of this, certain civil prosecutions may not be able to be pursued by the state.
While there are no specific plans currently under development, Ms. Baxter says the department regularly reviews its existing systems and practices to determine their ability to identify and detect fraud and abuse. "The department is always open to considering new technologies or processes as they become available that offer functional improvements and are cost-effective," says Ms. Baxter.
In Virginia, the Recipient Monitoring Unit (RMU) is responsible for reviewing noninstitutional Medicaid recipients' medical and pharmaceutical activities to identify possible abuse of Medicaid services, according to the State Utilization Guidelines.
"The utilization review process involves the retrospective clinical analysis of enrollee medical services reports, enrollee drug utilization reports, and medical records," says Cheryl Roberts, deputy director of the Department of Medical Assistance Services (DMAS).
The RMU also implements the Client Medical Management Program (CMM), which is designed to promote proper medical management of essential health care and cost efficiency. Recipients identified as engaging in possible abusive or inappropriate service utilization are enrolled in CMM for a 36-month period, with restrictions to a primary care physician and one designated pharmacy.
Audit programs contain costs
In Oregon, OPAR's Provider Audit Unit works with the independent Medicaid Fraud Control Unit within the Oregon Department of Justice by referring cases of suspected fraud and abuse, and conferring with them on a regular basis on issues related to fraud and abuse.
Random audits are conducted, as well as targeted audit activities designed to identify general inappropriate practices such as sloppy documentation practices, all the way up to blatant fraud and intentional abuse by providers of Medicaid services.
"When actual fraud is identified or suspected, those cases are referred to the Medicaid Fraud Control Unit for additional investigation and prosecution through the court system," says Ms. Baxter.
In addition, the Provider Audit Unit receives fraud referrals from the DHS Fraud Hotline and the DHS Web Reporting Tool, as well as from staff within DHS.
The OPAR Investigations Unit focuses on DHS clients who receive services paid for by Medicaid funds. "The unit has field staff located throughout the state who work with local branch offices. They act on tips, reports of fraud received through the Fraud Hotline and the DHS Web Reporting Tool, as well as other means," says Ms. Baxter.
In addition to its regular auditing activity, the staff of the Provider Audit Unit utilizes a variety of techniques, such as data mining and algorithm development, to identify and analyze anomalies and suspicious billing patterns. The unit works in collaboration with the Medicaid Fraud Control Unit, the federal Office of Inspector General, the U.S. Attorney General's office, and other groups who monitor and protect against provider billing practices.
"Provider billing practices are under the constant surveillance of the researchers of the Provider Audit Unit, who perform the data mining and algorithm functions," says Ms. Baxter.
In Virginia, an effective audit program designed to identify abusive provider billing practices is one of the mechanisms the state has employed in an effort to contain costs and provide quality health care.
The Provider Review Unit (PRU) monitors provider activity to identify potentially fraudulent or abusive billing practices, develop corrective action plans, recommend policy changes to prevent abusive billing practices, and refer abusive providers to other state agencies.
The PRU is embedded in the Program Integrity Division and oversees three auditing contracts reviewing approximately 26 different services and providers that participate in the Virginia Medicaid program. Any discrepancies found during the audits, such as abusive billing practices, are reported to DMAS.
Diagnoses-Related Group (DRG) Facility Auditing Services reviews the validation of DRG claims. "Highly specialized coding professionals and standardized coding principles are used, in order to identify incorrect coding and billing and/or processing errors and notify the department of associated overpayments to facilities," says Ms. Roberts.
MCOs decrease risk
Like Medicaid State agencies, Medicaid Managed Care Organizations (MCOs) are vigilant about preventing, identifying, and combating fraud and abuse.
"Most MCOs have developed comprehensive and dynamic fraud and abuse plans that include a variety of strategies," says Deborah Kilstein, director of quality management and operational support at the Association for Community Affiliated Plans (ACAP).
For example, MCOs are utilizing focused payment review edits and various software products to conduct increasingly sophisticated claims payment review. Following federal requirements, as part of the credentialing process health plans must review all providers against federal databases to ensure the provider has not been sanctioned in other states.
"In most states, they closely collaborate with state agency personnel to ensure investigative efforts are coordinated," says Kilstein. "Through organizations such as ACAP, the health plans are able to network and share successful strategies, lessons learned, and even warn against newly identified schemes other health plans should guard against."
"Medicaid fraud has been a concern and challenge since the inception of the Medicaid program," says Michigan's interim Medicaid director Stephen Fitton. However, the current structure of Medicaid in Michigan makes it less vulnerable to fraud and abuse, because so much of the program is administered by managed care organizations.
"These organizations are paid a monthly capitation rate and have the financial incentive to aggressively pursue fraudulent practices on the part of providers," Mr. Fitton says. "Further, because they are managing the care that beneficiaries receive, they are closer to actual service delivery and, therefore, in a better position to identify fraud."
Currently, possible fraud and abuse including provider billing practices is identified by several means, including complaints, data analysis, incoming referrals, beneficiary verification of services, and audits.
The department is currently in the process of implementing a new Medicaid Management Information System, CHAMPS, which will provide some advancement in the technology arena. The new technology will help lower fraudulent activity.
"In addition to CHAMPS, we are researching additional enhancements to our current practices, such as cost avoidance measures and partnering with other states and the Centers for Medicare & Medicaid Services to identify best practices," Mr. Fitton says.
Contact Ms. Baxter at (503) 378-3661 or [email protected], Mr. Fitton at (517) 241-7882 or [email protected], Ms. Kilstein at (202) 341-4101 or [email protected], and Ms. Roberts at (804) 786-8099 or [email protected].
Detecting and identifying Medicaid fraud and abuse always has been a concern and challenge for states, but with some states looking at reducing administrative burdens for providers, the door to increased fraud could be unintentionally opened.Subscribe Now for Access
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