Archive for May 25, 2013

Medicaid Fraud: Is it Worth States’ Time to Fight it?

Medicaid fraud has been a big problem for years, and as states ramp up for the Affordable Care Act’s Medicaid expansion deadline in 2014, it could become an even bigger one. More enrollees plus more providers equals more fraud potential. When estimates place the amount of Medicaid waste in 2012 at $19 billion for the feds and $11 billion in 2010 for the states, we’re talking real money. Can states really put a lid on fraud? And, more important, is it worth the cost to do so?

The first question can be answered by the Centers for Medicare & Medicaid Services, which recently compiled a list of “noteworthy picks,” or on-the-ground state policies that had succeeded at eliminating fraud. The answer to the second is a bit trickier. But the numbers from three states — California, Florida and New Jersey — suggest fraud prevention pays.

Let’s start with California. Lauded for its prevention measures, the state conducts a “Medi-Cal Payment Error Study” once a year to find patterns that would suggest fraud or waste. Bruce Lim, deputy director of audits and investigations for the Department of Health Care Services, calls the study “our road map.” It focuses on fee-for-service providers, and in 2009, the error study “showed about $1 billion in potential overpayments, which could include administrative and other errors,” Lim says. “Of that $1 billion, there is about $228 million in potential fraud.

“[We are] trying to stop the bleeding instead of the usual pay-and-chase model,” he says. The numbers suggest the state’s strategy is working. In fiscal 2011-2012, fraud prevention had a $445 million “positive impact” in areas such as overpayment prevention ($106 million), cost avoidance ($28 million), cost savings ($47 million) and recovery ($102 million). With a department budget of $75 million, that computes to a return on investment of about 6:1. Lim thinks he can do even better: “I know that with newer technologies and data mining we can do more.”

Florida’s approach is less high tech and more gumshoe. State officials conduct random, unannounced site visits for all kinds of providers, both before contracting with them and after. In one six-month period, officials visited 244 active providers and administered 175 sanctions. Overall, in fiscal 2010-2011 audit recoveries and cost avoidance amounts totaled $90.1 million, yielding an ROI of 6.8:1. “The value [of fraud prevention] is extraordinary,” says Kelly Bennett, Florida’s Medicaid fraud and abuse liaison. “Because we are out there visiting providers, we believe we increase compliance, which equates to cost savings.”

New Jersey has an initiative with the cool, spy-like moniker “Operation X.” The program tries to prevent individuals who have previously engaged in unethical or fraudulent practices from collecting Medicaid in the first place. The office matches information from a federal exclusion database against state wage and labor roles, says Mark Anderson, director of the Medicaid Fraud Division. “The feds give us access to their database, and we see if any of their folks have gotten any money whatsoever in New Jersey. Once matched, we assign an investigator to determine if that person worked at any place with Medicaid funding or services. If so, we seek to recover money from that individual and the places he or she worked, and if he or she was a provider, we try to recover the money.”

This one practice nets anywhere from 50 to 200 leads per month, Anderson says, and about 10 to 12 percent of those get investigated. Most cases settle; in total, Operation X sought or collected $970,000 between June 2009 and June 2011. That goes toward New Jersey’s fraud prevention bottom line, which in fiscal year 2011 totaled about $502 million in recovered and avoided payments on office costs of about $8 million, an ROI of about 6.3:1.

So does fraud prevention pay? As these three states show, it certainly can. The takeaway, however, may be in how its done.

This story was originally written and published by Governing magazine.

Arrest of HIX Chief Doesn’t Slow ‘Covered California’ Development

On March 15, the IT chief for California’s health insurance exchange (HIX) — called Covered California — James Joseph Brown Jr., was arrested. And he left his post on March 25, the day he was arraigned on felony conflict of interest charges, according to local news outlet The Sacramento Bee. The Bee also reported that when the crimes occurred, between Nov. 2 and Dec. 8, 2009, Brown was bureau chief of information systems for the Justice Department, according to a complaint filed in Sacramento Superior Court.

And now, with California’s health insurance/benefits exchange facing a year-end deadline, the exchange is scrambling to fill the position, according to the Sacramento Business Journal. 

Despite Brown’s departure, however, Covered California spokesman Dana Howard said there have not been any delays or missed deadlines.

“The project deadlines have [not] slipped due to Jim Brown’s departure,” Howard said via email. “Long before his exit, Covered California made a decision to push back delivery dates for certain enhancements to the system so our team can focus on an on-time delivery of core functionality.”

Despite pushing back delivery dates, however, deadlines have not been missed, he added. “Quite the contrary,” Howard said. “Building of the California Healthcare Eligibility, Enrollment and Retention System (CalHEERS) is ahead of schedule.”

Howard also said that Covered California expects to announce Brown’s replacement soon, and an interim project director has assumed the position until that replacement is found. “Covered California’s launch remains on schedule,” he said.

Biometrics Improves Homeless Services in New Jersey

Fingerprint scans have been used for years by government agencies to help improve security, identify criminals and reduce welfare fraud. But in a new twist, New Jersey will soon use it to track and manage food, shelter, medicinal services and other basic necessities it provides to its homeless population.

The state is deploying a new biometrics data management system (BDMS) that includes a Web-based fingerprinting component. Once online, the system will enable state officials to more efficiently track who is receiving homeless services and the types of services rendered.

Like many other states hit hard by the recession, New Jersey has seen its homeless population rise and the demand for services increase substantially. The state entered 79,604 people* into the New Jersey Homeless Management Information System (NJHMIS) in 2012 — up from 61,167 in 2011 and 56,754 in 2010, according to Abram Hilson, assistant director of NJHMIS. 

The project, which is modeled after a program in Bergen County, will start with with five locations that will serve as beta sites for three months. If successful, New Jersey’s Housing and Mortgage Finance Agency (HMFA) plans to offer the technology to approximately 224 county and nonprofit organizations providing homeless services in the state.

Bergen County has been scanning the fingerprints of people coming into its food banks since 2010. The technology has improved both the accuracy of records and the speed in which people receive their food.

Initially, state officials wanted to wait until the benefits of Bergen’s program were proven before adopting a similar system, Hilson said. But confident in its value, the state is moving forward, investing in an upgraded version that is different from Bergen’s in several ways. 

For example, the biometric system used in Bergen County requires someone to manually upload fingerprint data. The new state system, however, operates in real time. When a person comes in and has his or fingerprint scanned, staff members immediately see a record of all the services that individual has received — food, clothing, shelter, etc. They record what services the homeless person needs and the data is automatically provided to the NJHMIS through a Web service.

Driving the high-tech identification system is the need for timely information about the state’s homeless population and the services they’re using. More accurate statistics are critical to the financial viability of the agency because funding from the federal government is based on the number of services delivered. In addition, the system will automate a number of tasks, freeing up personnel to handle other important work, according to Hilson.

“Not only will this [fingerprint scanning system] save time because you don’t have to stand in line to fill out paperwork or sign anything,” Hilson said. “[You] just simply come in, put your finger there and then go about your business and get services.”

In instances where fingerprints can’t be read, the system is also designed to perform facial recognition as a secondary means of identifying a client, according to Ray Bolling, CEO of Eyemetric Identity Systems, which developed the system. Though the system will store the fingerprint and facial recognition data, shelter visitors don’t have to worry because their information will not be shared with law enforcement databases.

Funding for the pilot program comes primarily from federal grants and will be paid out of the housing agency’s budget, according to Hilson. The state’s housing agency runs NJHMIS, while a collaborative of nonprofits and county offices contribute participation fees that will help pay for the project.

“We are really hoping this technology will help agencies that usually experience a large volume of repeat clients,” said Erin Lue-Hing, NJHMIS data quality analyst. “It might not be something that would particularly work for everybody, but we are seeing a growing interest.”

*The NJHMIS numbers for 2010 through 2012 do not include Bergen County. This story was originally published on Image courtesy of Shutterstock.

Colorado Experiments with Telemedicine for Inmates

Specialized medical care will soon be a point and click away for some Colorado inmates.

The Colorado Department of Corrections and Denver Health Medical Center are launching a telemedicine pilot program in June for incarcerated patients that need consultations in the areas of rheumatology, infectious disease, orthopedics and general surgery. Instead of office visits, inmates and doctors will meet using high-definition video conferencing.

The state hopes the program will reduce the risk of prisoner escape and save money by avoiding costly offsite trips to the medical center. Nineteen different corrections facilities in Colorado will take part in the telemedicine effort.

“A lot of these transports occur after hours, so you have to pay the security detail overtime,” said Chris Wells, director of healthcare information technology architecture in the Colorado Governor’s Office of Information Technology. “The program improves accessibility to specialty care and there’s been some use cases throughout the U.S. about inmates escaping, so this decreases the risk.”

In addition, because both Denver Health and the Colorado Department of Corrections have modern video conferencing systems, there are no up-front costs associated with the program for either party.

This isn’t the first time the department has dabbled in telemedicine. According to Liz Mestas, clinical support services manager for the Colorado Department of Corrections, it was tried about 20 years ago for dermatology patients but didn’t work out.

Department staff set up TVs and machines so they could zoom in on skin issues such as a rash, enabling the doctor to do a diagnosis. Mestas said the problem wasn’t the technology — it was scheduling. If doctors were running late, it meant an inmate and the transport team would be waiting for hours, leading to overtime costs for the officers.

Mestas added that has changed now, as Denver Health schedules blocks of time on certain days for various specialty areas, making the process easier.

“[The doctors] are going to be there anyway, so now we’re just going to get them on the television,” Mestas said. “We’re going to use the same blocked time for that instead of driving offenders to the appointment.”

Preparatory Work

The Colorado Department of Corrections is busy this month installing connections in various areas where the telemedicine appointments will take place. Video conferencing has been used in some facilities already so that inmates can meet with psychiatrists on mental health issues.

From the department’s perspective, the major challenge with regular telemedicine use is deciding what inmates it should be used for. Mestas said her team is made up of mostly clerical employees, while most of the people involved with the program on Denver Health’s side are non-clinical. The last time the groups met, it was decided Denver Health would make the appointment determination.

“They are going to have to get the medical records first, have their doctors review it and see if the inmate can be seen by telemedicine or if we have to bring them on site,” Mestas said. “That’s going to be the biggest obstacle.”

Wells concurred and added that he expects a few bumps in the road until corrections and hospital staff members are comfortable with the telemedicine program and various operational protocols. Training materials are being prepared this month to help those involved get up to speed quickly.

If the program is successful, Wells hopes to expand it to include other specialties and hospitals in the future. Right now, the video conference will just be a simple remote link between the inmate and doctor. But over time, Wells would like to use the system to transmit images and other medical data as appropriate.

“I want to be able to show that the technology these days is not the issue,” Wells said. “You can do this over the Internet. E-commerce, online retailers, that sort of thing have been able to transmit sensitive data for years. So expanding this out to healthcare is the next level.”