Revenue Cycle Institute » Medicaid

Audit reveals Utah’s vulnerability to Medicaid fraud, waste, and abuse

Compliance Monitor — Wed, 26 Aug 2009 04:00:00 +0000

The Utah Medicaid program has significant room for improvement when it comes to program integrity, according to a report released by the Utah Office of Legislative Auditor General.

In the report, A Performance Audit Of Fraud, Waste, and Abuse Controls in Utah’s Medicaid Program, the agency lists two areas of cost savings that that could save the state and federal government more than $20 million in Medicaid costs.

Prior authorization. The report says that authorization for services prior to their implementation could be a great way to prevent overutilization of Medicaid services; however the reports says the state’s Bureau of Program Integrity does not properly use this strategy. The report estimates a 1% change in the approval rate for the prior authorization process could save $700,000 ($210,000 in state dollars).
Improved recovery effort. The report suggests the state step up its fraud, abuse, and waste recovery effort. The report estimates a 3% increase in this area could save $20.2 million ($5.8 million in state dollars) over time.

Whistleblower files $90M fraud lawsuit against TN hospital corporation

Compliance Monitor — Wed, 19 Aug 2009 04:00:00 +0000

Community Health Systems Inc., a Tennessee-based heathcare corporation, allegedly made illegal donations to New Mexico counties that contain three Community Health hospitals, according to an August 10 Albuquerque Journal article.

The suit claims Community Health made donations to the counties to subsidize the state’s Medicaid contributions. The counties then allegedly turned that money over to the state as their Medicaid contribution. Because the federal government pays three times what the state pays for Medicaid, Community Health allegedly received a return on their investment plus triple the amount donated.

The whistleblower suit was filed in 2005 by a former employee, Robert C. Baker. According to the article, Baker learned about the scheme when he took over as revenue manager for Eastern New Mexico Medical Center in Roswell.

Keep an eye out for Medicaid Integrity Contractors

Case Management Weekly — Thu, 13 Aug 2009 04:00:00 +0000

The following article is adapted from HCPro’s newest resource for hospital case managers—www.CaseManagementMentor.com—a free blog dedicated to connecting hospital case managers to industry pacesetters, peers, and best practices.

Nearly 500 Medicaid audits are under way in 17 states, and the program will roll out to the entire country through the end of the year, according CMS representatives who spoke on the Medicaid Integrity Program Special Open Door Forum on July 15.
CMS hopes to identify additional contractors within the next few days. These contractors, known as Medicaid Integrity Contractors, are firms CMS has chosen to carry out the following Medicaid Integrity Program goals:

Review provider actions to determine whether fraud, waste, or abuse may have occurred
Audit provider claims
Identify overpayments
Educate those involved in Medicaid administration, providers, managed care entities, beneficiaries and others with respect to payment integrity and quality of care

There are three types of contractors: Review, audit, and education MICs. The review MICs analyze data and identify issues to pass on to audit MICs to pursue, according to CMS. Education MICs will educate providers and others on Medicaid payment integrity and quality of care.

Read the rest of this post, or share your thoughts on this topic.

Browse more blog posts at www.CaseMangementMentor.com.

State Medicaid Fraud Control Units recovered $1.3 billion in 2008

Compliance Monitor — Wed, 12 Aug 2009 04:00:00 +0000

State Medicaid Fraud Control Units (MFCU) recovered $1.3 billion in court-ordered restitution, fines, civil settlements, and penalties for fiscal year 2008, according to an August 7 Office of Inspector General (OIG) report.

MCFUs also obtained 1,314 convictions; achieved 971 civil settlements and/or judgments; and excluded 755 providers from participation in the Medicare, Medicaid, and other Federal health care programs in FY 2008, the report stated.

The mission of the MFCUs is to investigate and prosecute Medicaid provider fraud and patient abuse and neglect. Forty-nine states and the District of Columbia have MFCUs—North Dakota does not have an MFCU.

The report highlights a settlement between the New York MFCU and Staten Island University Hospital (SIUH) and SIUH Systems, Inc., in which SIUH agreed to pay the Medicaid program $24.8 million. The settlement resolved allegations that SIUH Systems billed Medicaid for detoxification treatment provided in a special unit of the hospital without a state-issued certificate of operation.

Health reform could mean more fraud enforcement–and more fraud

Compliance Monitor — Wed, 29 Jul 2009 04:00:00 +0000

The Obama administration has made it clear that cracking down on healthcare fraud and abuse is a priority, and the latest version of the America's Affordable Health Choices Act of 2009 includes an additional funding increase to ensure that government money is not lining the pockets of fraudsters.

That increase in enforcement will be essential if more people are covered under a government system, according to Robert A. Wade, Esq., partner at Baker & Daniels, LLP, in South Bend, IN.

Wade says he would expect an uptick in fraud and abuse cases if the reform passes simply because more people will be covered and more money will funnel through the system. If the federal program covers more people, more claims would fall under the False Claims Act and Stark Law.

Some opponents of a government-run healthcare system cite the high level of fraud and abuse in the Medicare and Medicaid programs as a sign that the government is incapable of running an efficient system. However, experts argue that government programs are no more susceptible to fraud and abuse than private insurers.

"If a physician or [healthcare] entity has the capacity to commit fraud, they will do it regardless of which bucket they are taking from," said Wade.

A report from the George Washington University Medical Center in Washington D.C. titled “Health Insurance Fraud: An Overview” concurs.

"What is absolutely clear from virtually every reliable source on the subject is that healthcare fraud is a systemic problem affecting public and private insurers alike, in the individual market, the employer-sponsored group market, and public programs," the report stated.

Authors of the report, Sara Rosenbaum, Nancy Lopez, and Scott Stifler, said the reason the public is more aware of Medicare and Medicaid fraud is because the government is required to tell taxpayers where their money is going. Most recently, Office of Inspector General Chief Counsel Lewis Morris told Congress that the United States lost $60 million to healthcare fraud in 2008, which was 3% of the government's budget.

Private insurance companies are not obligated to release such numbers so fraud involving those companies stays out of the headlines. The amount of money private insurers lost to fraud is reported to the board of trustees, not the public.

Fraud and abuse enforcement is much more significant on the public side as well. Just this year, President Obama allotted $311 million of the $3.4 trillion budget on healthcare fraud and abuse prevention. The Health Care Fraud Prevention and Enforcement Action Team also helped strengthen enforcement.

"[Healthcare fraud enforcement] has been a theme we have seen in the president's budget and Medicare rule making," says Ed Dougherty, senior vice president of B&D Consulting. "I would say regardless of what happens in healthcare reform, there will be increased focus in all sites of service."

Medicaid beneficiary fluctuations lead to higher costs

Patient Access Weekly Advisor — Mon, 27 Jul 2009 16:48:00 +0000

Medicaid's "cumbersome" policies often lead to patients not getting or filling their prescriptions, receiving important diagnostic tests, or managing their chronic disease, which will lead to more costs down the road, according to a new report released by the Association for Community Affiliated Plans.

The Medicaid system, which varies by state, requires beneficiaries to show proof more than once a year that they and their children are still eligible for the public program. This leads to many falling off the rolls, which is a cycle that interrupts their continuity of care and jeopardizes their health.

Additionally, with so many people "churning," which means dropping out and back in to the Medicaid rolls every few months, the federal goal of measuring the quality of the patient care has become extremely problematic if not impossible, according to the group, which represents 42 nonprofit safety-net health plans serving six million beneficiaries in 23 states.

Read the full story by HealthLeaders Media's Cheryl Clark.

Medicaid Integrity Provider Audit Program: Special Open Door Forum held July 15

Andrea Kraynak, CPC-A — Wed, 15 Jul 2009 13:22:29 +0000

CMS is hosting a Special Open Door Forum for providers on the Medicaid Integrity Program (MIP) provider audit program, today, Wednesday, July 15. According to CMS, the call will include information on: The MIP audit process Audit timelines Web site information Future meetings/calls There will also be a Q&A period on the call so participants can ask questions. The call will be held [...]

CA authorities take down largest Medi-Cal fraud scheme in state history

Compliance Monitor — Wed, 15 Jul 2009 04:00:00 +0000

On July 9, California authorities arrested 20 individuals believed to be involved in a Medicaid fraud scheme that defrauded the Medi-Cal program of allegedly $4.6 million, according to a Department of Justice (DOJ) release.

The most recent arrests bring the total number of defendants connected to the scheme to 42. The DOJ alleges that the 42 defendants and two others conspired to bill the Medi-Cal program for in-home nursing services provided by unlicensed individuals.

The alleged organizer of the ring, Priscilla Villabroza, pleaded guilty to five counts of healthcare fraud last year and admitted that she and others hired unlicensed professionals to provide in-home nursing services to Medi-Cal beneficiaries, many of them children with cerebral palsy or developmental disabilities. Villabroza then billed the program, claiming the unlicensed nurses were licensed vocational nurses (LVNs). Villabroza allegedly instructed the unlicensed nurse defendants, some of whom had no medical training, to lie to parents and claim they were LVNs.

According to the DOJ, patients complained about the nurses’ inability to provide care. In one instance, a nurse fled a medical situation, presumably because she was in over her head and unable to administer the proper care.

Have you had an experience with Medicaid Integrity Contractors?

The RAC Report — Thu, 09 Jul 2009 04:00:00 +0000

If you’ve had experience with Medicaid Integrity Contractors (MIC), we want to hear from you!

If you are interested in sharing your experience or story, and possibly participate in a live audio conference on the MICs, please e-mail Andrea Kraynak at akraynak@hcpro.com for more information.

Thank you!

Healthcare fraud effects public and private insurance alike

Compliance Monitor — Wed, 08 Jul 2009 04:00:00 +0000

A report published by the George Washington University Medical Center, Health Insurance Fraud: An Overview, states that the healthcare fraud problem is not specific to public insurers (i.e., Medicare and Medicaid). According to the report’s authors, Sara Rosenbaum, Nancy Lopez, and Scott Stifler, private insurance providers are just as susceptible to fraud as Medicare and Medicaid.

The report states, “What is absolutely clear from virtually every reliable source on the subject is that healthcare fraud is a systemic problem affecting public and private insurers alike, in the individual market, the employer-sponsored group market, and public programs.”

The report also states that medical providers commit 80% of healthcare fraud, consumers commit 10%, and a combination of insurers and their employees commit the final 10%.

The report’s authors argue the reason Medicare and Medicaid appear to be more susceptible to fraud and abuse is because those programs cover the elderly, women, minorities, the less educated, and the poor, who are also the most vulnerable to fraud.

Sebelius: New fraud prevention team will turn up heat

Compliance Monitor — Wed, 27 May 2009 04:00:00 +0000

On May 20, Attorney General Eric Holder and HHS Secretary Kathleen Sebelius announced the government's latest tool in the fight against healthcare fraud and abuse—The Health Care Fraud Prevention and Enforcement Action Team (HEAT).

With what appears to be an intended pun, Sebelius said in an HHS press release, "Today, we are turning up the heat on perpetrators who steal from the taxpayers and threaten the future of Medicare and Medicaid."

The HEAT team will consist of senior Department of Justice and HHS employees. Their task will be to strengthen existing fraud prevention tools and investigate new ways to root out and prevent fraud, which, according to Office of Inspector General Chief Counsel Lewis Morris, accounts for about 3%—or more than $60 billion—of the government's annual healthcare investment.

The team will build on demonstration projects created by the HHS Inspector General and the CMS that focus on the vulnerable durable medical equipment (DME) industry. This includes:

Increasing site visits to potential suppliers to prevent imposters from posing as legitimate DME providers
Increasing training for providers on Medicare compliance, and offering providers the resources and the knowledge they need to help identify and prevent fraud
Improving data sharing between CMS and law enforcement to identify patterns that lead to fraud
Strengthening program integrity activities to monitor and ensure Medicare Parts C (Medicare Advantage plans) and D (prescription drug programs) compliance and enforcement

Holder and Sebelius also announced the expansion of the Medicare Fraud Strike Forces. Since their inception in 2007, the Medicare Fraud Strike Forces have recovered more than $240 million in fraud and abuse cases in South Florida and Los Angeles. The targets for the latest expansion are Detroit and Houston.

The creation of the HEAT team, the expansion of the Medicare Fraud Strike Forces, and the creation of a new healthcare fraud hotline (www.hhs.gov/stopmedicarefraud or 1-800-HHS-TIPS) continue President Barack Obama's push for greater healthcare fraud enforcement. Obama has made strengthening the integrity of the Medicare and Medicaid programs a priority for 2010, allotting $311 million of the $3.4 trillion budget on healthcare fraud and abuse prevention.

DOJ and 16 states join whistleblower lawsuit against Wyeth

Compliance Monitor — Wed, 20 May 2009 04:00:00 +0000

The United States, along with 16 states, is joining two whistleblower cases filed against pharmaceutical giant Wyeth for allegedly failing to pay millions in Medicaid rebates, according to a Department of Justice (DOJ) release.

According to the release, between 2000 and 2006, Wyeth gave large discounts to hospitals that purchased Protonix Oral and Protonix IV as a package deal. The DOJ assumes this was done so Wyeth could gain a foothold in the lucrative outpatient medication market. The logic being, patients who received the intravenous version of the stomach acid suppressant (Protonix IV) would also use the oral version once they were discharged.

The problem is Wyeth failed to extend the discount to Medicaid agencies. According to the release, Wyeth knowingly hid the discount program from the Medicaid program in order to avoid paying hundreds of millions in rebate payments, which it was required to pay under the Medicaid Drug Rebate Program.

NY Medicaid fraud unit is nation’s best

Compliance Monitor — Wed, 13 May 2009 04:00:00 +0000

The U.S. Department of Health and Human Services (HHS) has selected New York’s Medicaid Fraud Control Unit (NYMFCU) as the top Medicaid fraud unit in the country according to a release issued by New York Attorney General Andrew Cuomo.

The announcement comes a week after Cuomo declared the NYMFCU recovered more than $263 million in civil damages and criminal restitution in 2008, doubling the totals from 2007.

“The New York MFCU's statistical and monetary recovery achievements, in fiscal year 2008, were outstanding and are deserving of special recognition,” HHS stated in the release.

NYMFCU will receive the award June 2 at a ceremony in Washington, D.C.

Florida health plan company enters $80M agreement to avoid fraud charges

Compliance Monitor — Wed, 13 May 2009 04:00:00 +0000

On May 5, Tampa-based WellCare Health Plans, Inc. agreed to enter a deferred prosecution agreement (DPA) with the Department of Justice (DOJ) and pay $80 million in restitution and forfeiture to avoid healthcare fraud charges.

After an investigation, more than 200 special agents and investigators from the FBI, OIG, and the Florida Medicaid Fraud Control Unit raided WellCare offices, according to a DOJ release.

The investigation and subsequent raid arose from allegations that WellCare falsely and fraudulently inflated expenditure information submitted to the Florida Medicaid and Healthy Kids programs from mid-2002 through 2006.

In order to avoid a healthcare fraud conviction, WellCare must abide by several DPA requirements, including:

Paying a civil forfeiture of $40 million
Paying an additional $40 million in restitution to the Florida Medicaid and Healthy Kids programs
Retaining and paying an independent monitor to review and monitor business operations
Cooperating with the government’s ongoing federal and state criminal investigation of former WellCare executives and employees
Implementing updated policies and procedures to ensure accurate reports of federal and state healthcare program information
Developing and operating an effective corporate compliance and governance program

Seven California companies indicted in ‘massive’ Medicaid fraud scheme

Compliance Monitor — Wed, 25 Mar 2009 12:00:00 +0000

On March 20, California Attorney General Jerry Brown joined a whistleblower suit that alleges seven companies operating in California overcharged the state for laboratory tests, according to a Department of Justice (DOJ) press release.

A state investigation revealed the companies’ laboratories were provided discounts when paid directly by doctors, patients or hospitals—sometimes up to six times cheaper than what they charged Medicaid for the same tests, according to the DOJ. Brown believes the state can recover hundreds of millions in overpayments from the case.

The press release named Physicians Immunodiagnostic Laboratory, Westcliff Medical Laboratories, Whitefield Medical Laboratory, Seacliff Diagnostics Medical Group, Quest Diagnostics, Laboratory Corp. of America, and Health Line Clinical Laboratories, now known as Taurus West, as the defendants in the case.

Iowa hospitals struggle in hard economic times

Case Management Weekly — Fri, 20 Mar 2009 10:14:00 +0000

The Iowa Hospital Association (IHA) reports declines in service areas and increases in charity care for Iowa hospitals. Considering all factors, Iowa hospitals’ overall margins have fallen from 5.5% in 2007 to -9.6% at the end of 2008.

Kirk Norris, the President and CEO of the IHA, comments that, unlike other businesses, hospitals must provide their services 24 hours a day every day, despite their customers’ inability to pay.

Another factor contributing to the hospitals’ economic hardships, according to the IHA, are reimbursement rates from Medicare and Medicaid. These programs together make up about 60% of Iowa hospital revenue, and in 2008 Iowa hospitals lost more than $275 million to the two programs.

Hospitals are among the largest employers in the counties where they are located, and Norris calls for the government to take a close look at the burden programs such as Medicare and Medicaid are placing on them.

Source: Iowa Hospital Association

Hospitals must submit Medicare Advantage claims as far back as October 2005

Medicare Weekly Update — Tue, 10 Mar 2009 00:00:00 +0000

Last week, CMS published Transmittal 1695 to the Claims Processing Manual, reaching back to FY 2006 to include Medicare Advantage (MA) Plan members in the Disproportionate Share Hospital (DSH) calculation. CMS calculates a DSH adjustment to DRG payments for hospitals serving a disproportionate share of low income patients.

By regulation, low-income patients include certain Medicaid patients (Medicaid portion) and certain Medicare patients (Medicare portion). The Medicare portion is a ratio of Medicare Part A patients receiving Social Security Income (SSI) (disabled) divided by the total Medicare Part A patients. The Medicare portion includes MA members because they are eligible for Medicare Part A, even though the payment is being made through a MA plan. The effect of including MA members may be positive or negative for hospitals, depending on how the addition of the MA members affects the overall Medicare portion ratio.

This issue may sound familiar because in July of 2007 CMS published Transmittal 1311 that gave instructions for hospital to include MA members in their Disproportionate Share calculation for FY 2007. Transmittal 1695 requires hospital who received DSH to go back as far as FY 2006 and submit MA plan member data. The affected providers have a limited time frame to submit the claims data for FY 2006: from the implementation date, July 6, 2009, through November 30, 2009.

The process for submitting MA member data entails submitting a separate claim to the MAC/FI with condition code 04 (Information Only) and the Medicare Beneficiary’s HICN. CMS has instructed contractors to override timely filing edits for these claims. They have also turned off the Medicare Summary Notice to the patient.

NOTE: Teaching hospitals are not affected by this requirement because they would have already submitted a claim for Indirect Medical Education payment with condition code 04 and 69, which would allow CMS to account for the MA plan members in their DSH calculations.

Monroe County recovers $3.3M in Medicaid overpayments

Compliance Monitor — Tue, 24 Feb 2009 23:00:00 +0000

The New York Office of Medicaid Inspector General ordered Saratoga Pharmacy to repay approximately $3.3 million in Medicaid overpayments to Monroe County as a result of inappropriate billing from 2004 to 2005, according to a Monroe County press release.

According to an article published in the Rochester Democrat and Chronicle, Rick Marchese, senior deputy Monroe County attorney said Saratoga failed to document prescription deliveries and submitted claims using medical license numbers that didn't match the doctors who prescribed the medication.

Stimulus plan will kick in millions to Medicaid

Patient Access Weekly Advisor — Wed, 11 Feb 2009 14:15:24 +0000

The stimulus plan passed by the Senate Tuesday includes millions of dollars for Medicaid, meaning hospitals may see a lift in reimbursements. The Senate voted to approve an $838 billion economic stimulus plan after the House passed a $820 billion version earlier, The New York Times reported. “Throughout our history, the federal government has catalyzed a good [...]

Insurer backs out of Florida’s Medicaid Reform program

Patient Financial Services Weekly Advisor — Mon, 09 Feb 2009 14:14:17 +0000

It does not pay enough money. That is the contention of Wellcare, Florida’s largest Medicaid insurer, which announced it is leaving the state’s Medicaid Reform program, The Miami Herald reported this week. Government reimbursement rates are just too low, the insurer said. ”WellCare’s action is a result of recent state budget cuts that make it economically unfeasible [...]