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OIG Finds That Barred Providers Are Still Billing Medicaid

The Department of Health and Human Services (HHS) Office of Inspector General (OIG) reported that hundreds of Medicaid providers that have been banned in one State continue to provide services and bill Medicaid in another State. The OIG found hundreds of these cases and reported that 12% of providers terminated by one state’s Medicaid program were still able to participate in other States. The Patient Protection and Affordable Care Act (ACA) requires that any provider terminated for fraud, integrity, or quality of care by one State to also be terminated from participation in any other Medicaid program. This provision was in response to past problems where a second State’s program was vulnerable to fraud, waste, or abuse committed by a terminated provider.

The OIG identified 94 terminated providers that billed Medicaid $7.4 million for services performed after each provider’s termination for cause by another State. This is not a new issue especially since the OIG reported finding weaknesses in the implementation of this mandate and recommended improvements in 2014. The vulnerabilities permit terminated providers to continue to provide services and bill other Medicaid programs. The OIG found that state failure to meet the mandates is due, in large part, to the ongoing failure of CMS to collect complete and reliable termination data, as well as to differentiate for cause terminations from other administrative actions reported by the States. Carrie Kusserow, an experienced healthcare compliance consultant, stated that “the problem is not limited to the amount of money inappropriately paid by Medicaid to terminated providers. In many cases, the cause of the terminations relate to improper care of beneficiaries due to impairments, ignorance, or carelessness by the provider. By continuing Medicare payment of services, they are placing beneficiaries at further risk.”

Another issue explaining State inability to stop terminated providers arises from the fact that 25 of the 41 States using managed care to deliver Medicaid services did not require managed care providers to directly enroll with State Medicaid agencies. As such, if a State has not directly enrolled a provider, it cannot terminate that provider, and it may not even be aware that the provider is participating in its Medicaid program. Furthermore, some States mistakenly believe that as long as a provider has an active license from the relevant State board, the State Medicaid agency should defer to their judgment and not terminate the provider.
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In conducting their review, the OIG followed a methodology whereby they directly reviewed each State Medicaid agency’s rosters of all Medicaid providers terminated for cause and checked to see if they were still participating in any Medicaid fee-for-service and managed care programs. The OIG was then able to identify who was terminated but continued to perform services and bill Medicaid in another state. The OIG also calculated the amount that Medicaid paid each provider for services performed after their termination for cause from another State. Jillian Bower, an expert on sanction screening, stated that “it is a must to screen against not only the Federal LEIE and GSA debarments lists, but also any applicable State Medicaid sanction databases.” She notes that “in light of the OIG report, it is advisable to check any provider who has recently moved from another State with any sanction database that the State may have.” Lastly, Bower stated “quite frankly, the best practice is to check all Medicaid State sanction databases.”

The OIG has called upon CMS to develop a comprehensive data source of providers terminated for cause. Until that is done, the State Medicaid agencies will continue to face barriers in meeting the legal mandates regarding terminated providers. CMS concurred with the following restated OIG recommendations from 2014:

  1. Require State Medicaid agencies to report all terminations for cause;
  2. Work with States to develop uniform terminology to clearly denote terminations for cause;
  3. Require State Medicaid programs to enroll all providers participating in Medicaid managed care; and
  4. Furnish State guidance that termination isn’t contingent on the provider’s active licensure status.
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