Tag Archive for Medicaid

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.

Lessons from Idaho’s Medicaid Readiness Project

Reaching an eligibility decision on the same day a customer applies for services — not 20 to 30 days later — is more than wishful thinking. It’s a reality in Idaho, where just over 70 percent of SNAP applicants and half of Medicaid applicants get same-day eligibility decisions.This is the story of how Idaho is creating a new model of service delivery. Extending its heritage of family-centered service, the Idaho Department of Health and Welfare is taking a cautious and prepared approach to the Affordable Care Act (ACA) through its Medicaid Readiness Project. The Department sees the law as a springboard to change — streamlined eligibility determination with integrity that delivers lasting human and business value.Implement immediate improvements early and often.Make improvements that have immediate business value and increase business capacity.Implement incremental end-to-end business changes for constant functional validation. Increase decision making at the first point of contact with the customer. Define business changes at the process level.Resolve conflicts in circumstances and verification in every customer interaction.Reduce non-productive tasks and reduce administrative costs.Leverage unprecedented 90-10 federal funding. Use 90-10 funding for core improvements to benefit all programs and services.Facing Ever-Escalating DemandsThe health and human services community has faced significant challenges in recent years. The economic downturn has driven huge increases in caseloads for SNAP, cash assistance and Medicaid programs. Budget cuts and federal oversight only intensify mounting administrative pressures. Idaho has not been immune. In fact, the state saw a 123 percent increase in food stamp caseloads between 2007 and 2010 — the second highest growth rate in the nation.When the ACA was signed into law in 2010, it was introduced into this complex environment. Already overwhelmed, many health and human services practitioners viewed the responsibility of implementing such sweeping change as daunting, if not impossible. While states are taking their own approaches to implementation, confusion is common. What do the new rules mean? How must enabling technologies change? What must be done to accommodate growing Medicaid rolls? For many, questions outnumber answers. Turning an Obstacle into OpportunityThe Idaho Department of Health and Welfare found a pragmatic answer. Working thoughtfully and strategically amid uncertainty over the law’s future, the Department sees the ACA as an opportunity to reinvent eligibility processes and modernize service delivery structures — welcomed outcomes no matter what happens with the ACA. Grappling with the ACA challenges shared by other states, Idaho had an “aha” moment. The Department realized that within the complexity of the law is a fundamental focus on streamlining and modernizing Medicaid eligibility determinations. For example, the ACA provides new paths for verifying household information and making eligibility decisions in real time, which reduces the red tape for both agencies and families, improves same day service, and decreases backlogs and paperwork for staff. What’s more, the ACA improves eligibility determination at both application and redetermination points, which drives integrity in decision making and reduces the number of administrative closures. Focusing on the processes without getting weighed down by the policies, it became clear that these process improvements aligned with the Department’s own modernization agenda. More specifically, there was a common thread with the Department’s commitment to work as a customer-focused, process-driven organization that provides same day service, minimizes churn, maximizes retention, reduces administrative burdens and costs, relieves staff workload and improves timely service to Idaho’s families. A forward-thinking approach was born from this commonality. Why not use the ACA to improve Medicaid eligibility and transform eligibility determination across all programs—extending the work that was already being done?Transforming the Business Model (a critical first step)The first step for Idaho was to clearly define a service delivery model that effectively and accurately delivered decisions and services. Idaho’s “New Service Delivery” model was then coupled with new ACA eligibility stipulations to provide an overarching service delivery design supporting all eligibility programs. The model incorporates fundamental and transformational redesigns, lowers operating costs, and improves program integrity by:• Resolving information and making eligibility decisions on the day of application.• Bringing eligibility decision makers “to the front”—they are the first contact. • Seeking all necessary information to verify a family’s status.• Operating from a customer’s perspective rather than from a program or service perspective. • Providing “informed choice” to help customers understand their application options.• Managing customer volume and traffic to match decision-making resources.• Tracking all case management tasks with auto-alerts only when actions are needed.Taking a Cautious and Prepared ApproachOnce developed, this business model informed decisions around planned ACA technology and system changes, positioning Idaho to leverage available 90-10 federal funding while realizing immediate and incremental wins throughout the life of the project.After reviewing pending rule changes, Idaho designed a three-phase, 23-month project centered on ACA requirements that began in February 2012. This Medicaid Readiness Project is allowing the state to move forward on aspects of the legislation that will provide immediate value while taking a wait-and-see approach to unresolved issues. It is also an example for other states to gain ideas for process changes, technology pursuits and rule interpretation while taking advantage of time-limited federal funding opportunities. The initiative includes the following phases:Modernization. This modernizes eligibility and payments systems in line with ACA requirements for online access, simplified application processes and improved verification systems. Focusing on modernization early can minimize future costs of administering Medicaid to a caseload that could almost double if ACA remains and creates a foundation for sustained capacity and performance improvements. This phase will take a bulk of the time and funding but all functionality will benefit all programs and will be value added improvements to the eligibility process despite pending policy or rule changes.Medicaid Expansion. The Supreme Court gave options to states around the expansion of Medicaid to new eligible populations, Idaho is seriously assessing the costs and benefits associated with this new optional piece of ACA. The expansion phase of Idaho’s Project was purposely placed later in the project to ensure a decision by the Supreme Court could help inform long term decision making at the state level and allow time for all Medicaid requirements and options to be clearly assessed. The timing of this phased approach also allows political and budget questions to be fully vetted to ensure clear support for the Department’s approach to Medicaid expansion.  Connection. Once all decisions related to the first two phases are fully vetted, Idaho will focus on the requirement for Medicaid systems to connect to a health insurance exchange.By taking an opportunistic ACA approach that drives necessary outcomes no matter Idaho’s decision to expand Medicaid or build a state or federal exchange, Idaho is providing eligible, low-income families with service access and continuity to help families find stability and greater self-sufficiency with less administrative burden for all and at a lower administrative cost.Lori Wolf and Greg Kunz are deputy administrators of the Idaho Division of Welfare — Department of Health & Welfare; Debora Morris is the public assistance lead for Accenture’s Human Services Group for North America.This article was published previously in Policy & Practice, the journal of the American Public Human Service Association.

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