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DC Medicaid revamps its fraud detection processes
Did a dentist extract the same patient's tooth twice, or extract teeth the year after they gave the patient upper and lower dentures? These are obvious red flags for fraud, while other types of fraud are less easy to identify, says Ann Page, RN, MPH, director of Health Care Accountability Administration for Washington, DC, Medicaid.
"We have revamped our processes. We are a small jurisdiction, and we are just trying to clean up and tighten up the program," reports Ms. Page. "I'm pleased to say that over the last three years, we have tripled the amount of potential fraud we have detected and referred out."
Health care reform legislation puts extra emphasis on fighting fraud and abuse, notes Ms. Page, along with the Center for Medicare & Medicaid Services' new proposed rule to strengthen Medicaid fraud oversight.
"Health care fraud is a concern across the entire health care industry. It is not a problem unique to Medicaid," says Ms. Page. "It's a problem, and it's a pretty big problem, at a time when budgets are very tight."
Ms. Page says that state Medicaid agencies are currently faced "with really bad choices that nobody wants to make. Do we cut back on services, or do we cut back on people?"
This makes it even more important that Medicaid is not wasting any money, says Ms. Page, and is paying only for services that are really needed, and paying only people who are delivering those services.
"The department has been thinking about this for a long time, and when the department got realigned, it decided to dedicate a whole administration to this," says Ms. Page. The department's new Health Care Accountability division covers program integrity, looking at both fraud, waste, and abuse and utilization management.
The department looked closely at how to make the best possible use of its staff to prevent fraud. "One of the things we've been trying to focus on is how do we deploy the people that we have here to make sure we are paying for services appropriately," says Ms. Page. "We want to identify outright fraud when it does exist, but sometimes providers just make errors. They are human like everybody else."
Errors are not always a sign of intentional wrongdoing and can occur, because providers are just trying to deal with the complexities of billing correctly sometimes even because the department hasn't paid them correctly, explains Ms. Page.
While some staff specifically look for fraud, others do reviews of providers to be sure that all billing was completed appropriately and correctly, says Ms. Page.
"We take both of those approaches; we try to find both intentional wrongdoing and accidental errors," says Ms. Page. "One of the things we have done is specialize those two functions."
One investigation unit is now dedicated to identifying fraud, says Ms. Page. "Under federal regulations, we are not the party that conducts the full criminal investigation," she notes. "What we are required to do, and what we are limited in doing by federal regulations, is to conduct a preliminary investigation."
This means that when the department uncovers reasonable, reliable evidence of likely fraud, it is then required to refer this to law enforcement to pursue criminal action, says Ms. Page.
Data mining is key
"We pay millions, maybe over a billion, of claims a year," says Ms. Page. "It is not possible to review all of those. So, how do we creatively identify what types of fraud are likely to occur?"
One important point, says Ms. Page, is that fraud can be committed by all different types of providers. "We will find providers that have billed for a service, and when we contact the beneficiary, they say they didn't get the service and never saw the provider," she says.
The department also enlists the public's help by publicizing its toll-free number to report fraud, so that individuals can call in to report things that don't seem right to them, says Ms. Page.
Effective fraud detection calls for "imagination and creativity" in investigators, coupled with technology, says Ms. Page. While the investigative unit is heavily dependent on computers, she says, investigators have to be clever to determine all of the possible ways in which fraud could be taking place.
Ms. Page adds that the department plans to take advantage of the free training being offered by the federal government's newly created Medicaid Integrity Institute.
Ms. Page credits her department's success in tripling the amount of fraud it detects largely to the technique of data mining. "We are doing a lot of data mining, and we are getting more sophisticated with it," she reports. "I would have to say that if we are looking at combating fraud, data mining is how we are doing that. That is the key."
"We are trying to prevent fraud up front," says Ms. Page. "One of the ways we are trying to do that is to prevent bad apples from getting into the program to begin with."
The department first focused on durable medical equipment (DME), because this was identified as an at-risk provider type, says Ms. Page. A DME provider enrollment reform initiative was implemented, with more stringent requirements. All DME providers were contacted, and informed that they are required to reapply and re-enroll in the program, says Ms. Page.
"We will require them to re-enroll every three years," she adds. "Just because they met requirements in year one doesn't mean that later on, something hasn't changed."
DME providers are now required to be enrolled in the Medicare program. "If you are not serving older adults, then that's going to limit your ability to serve our population," says Ms. Page. "We view that as a pretty fundamental requirement. Maybe you have done something that has caused you to lose your Medicare enrollment. That has implications for us, and you would be terminated from our program."
About 30 DME providers already on the books didn't re-enroll, and these providers were terminated as a result, says Ms. Page. "Some of them may no longer have been in business. Others have tried to re-enroll but could not meet the standards," she says.
In 2010, the department implemented a new Medicaid Management Information System, which allows for more targeted data querying, says Ms. Page, and gives reports that are utilized for protection against fraud and abuse. Certain information, such as the rank order of providers and how many services they billed for, can pinpoint the need for further investigation, she says.
"If last year a provider billed Medicaid half a million dollars, and this year that provider is billing $2 million, you will want to look at what is going on," says Ms. Page. "How did their Medicaid income quadruple in one year?" In this case, investigators would want to know whether there was a commensurate quadrupling of services, or whether more expensive procedures were used, she says.
Without this type of claims data, says Ms. Page, fraud detection efforts are "not going to be very fruitful." While the department has always had the ability to look at claims data, the new software allows data to be retrieved and manipulated more easily, she explains.
This allows investigators to analyze larger amounts of data, she says, so they can focus on at-risk provider types, for example, rather than looking at every Medicaid provider type. "They can review what is happening in the field. If there is dental fraud happening in one state, they can look at whether it is also happening here," says Ms. Page.
If law enforcement agencies ask for more information for an investigation, the department can easily supply it, explains Ms. Page. "They may say to us, 'You gave me three months of claims data. We want to see three years,'" she says.
Contact Ms. Page at (202) 478-5792 or email@example.com.