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Medicaid Fraud Control Units (MFCUs) are becoming all-purpose health care enforcers, partnering with government agencies at all levels to combat fraud. "These networks have been established, and they are not going to go away," warns Ellyn Sternfield, director of the Oregon Medicaid Fraud Control Unit in Portland.
Today, all but three states — Idaho, North Dakota and Nebraska — have active MFCUs. MFCUs typically follow the lead of the state Attorney General’s (AG) Office, where most are housed. According to Sternfield, that makes pharmaceuticals, long-term care (LTC), and medical records high-priority items for most of those units.
Ironically, the Health Insurance Portability and Accountability Act (HIPAA) of 1996 poured money into nearly everyone’s coffer except the MFCUs’. The Federal Bureau of Investigation (FBI), HHS Office of Inspector General (OIG), and U.S. Attorneys Offices all received a major infusion of cash to target health care fraud. What the MFCUs got was improved coordination on billing fraud and patient abuse cases at the national, regional, state, and local levels.
Gone are the turf wars of the past, says Sternfield. Today, U.S. Attorneys routinely turn to MFCUs to see if there is a Medicaid program impact on their investigations, and when the Department of Justice gets notice of a qui tam filing, it does the same.
"There is a lot more cooperation and coordination on health care fraud than there ever used to be," Sternfield says. It is now standard practice for a task force to include representatives from the OIG, FBI, U.S. Attorney’s Office, and the state Medicaid agency and Medicare carrier.
On one hand, that means more resources and a more coordinated attack aimed at providers because it allows all these players to pool their resources and discover any weaknesses in their case. "It may be daunting to face that on the defense side," says Sternfield. "But on the positive side, you are dealing with everybody at once, and you are not going to have to worry about a piecemeal attack."
About a year ago, the jurisdiction of these units was expanded to include billing fraud against any federally funded health care program as long as the fraud started with Medicaid. Their domain also was expanded to include residents of any LTC facility, as long as it is a residential setting where two or more unrelated persons pay for their housing and receive some assistance with their activities of daily living.
MFCUs mainly are reactive and differ state to state, according to Sternfield. "There are as many differences as there are MFCUs," she says. Part of the difference turns on state law, and part of it on the fact that most MFCUs are situated in the AG’s office and, for the most part, follow the AG’s lead.
In Mississippi, that means the MFCU is putting a high priority on patient abuse, much like the AG in that state. In Washington state, where the AG is emphasizing multistate cases, the MFCU is taking a large role in a number of national cases.
That said, Sternfield says there are several issues that currently cut across nearly every state:
s Pharmaceutical pricing. "The overriding hot-button in nearly every state right now is pharmaceutical pricing," asserts Sternfield. The reason: Medicaid pharmaceutical costs have skyrocketed and, unlike Medicare, Medicaid programs cover at least some pharmaceutical costs. In Oregon, for example, increased cost pharmaceuticals were a major reason the state’s Medicaid budget leaped from $1.5 billion in 1996 to $2.3 billion in 2001. (See related story on pharmaceutical fraud, page 1.)
s Long-term care. Look for MFCUs to continue pursuing quality-of-care cases against LTC facilities, Sternfield warns. But she adds that most units focus not only on abuse and neglect, but whether the facility committed fraud by billing for a level of services not actually provided to residents.
On a more positive note, she predicts that more and more states will retreat from the "aging in place" doctrine, which holds that one LTC setting can meet all of a senior’s needs even as those needs change. "How fair is it for the MFCUs to look at an assisted living facility for some violation of law for failing to provide services when three years earlier, the facility could have predicted they would not be able to that level of care," Sternfield argues.
Other concerns in LTC include "wave" therapy by ancillary providers where therapists barely see a resident but then bill for providing a comprehensive service.
s Managed care. The notion that no fraud exists in managed care is dead, Sternfield says. While nobody knows exactly what direction ongoing investigations may take, she says MFCUs are looking at the use of unqualified providers and underutilization as well as the fiscal integrity of managed care organizations.
Medicaid and Medicare enrollment projections have fallen far short of original expectations, but many states, including Tennessee, Arizona, New York, and California still have high managed care penetration, she notes.
s Medical records privacy. Regardless of what happens at the federal level, Sternfield says at least eight state legislatures are revamping their rules governing medical records privacy. She says the enforcement nightmare that may flow from that fact is very problematic.
"Can you imagine what is going to happen if we have 50 different standards of medical records privacy?" she asserts. "If the feds don’t act, the states are going to act, and this is going to be a political issue."