The House Energy and Commerce Committee on Health held a hearing focused on improving Medicaid integrity by closing costly loop holes in the system. The Committee Chair noted that Medicaid is the world’s largest health coverage program that spends an estimated $500 billion a year. The program also accounts for more than 25% of State spending. The increasing size, complexity, and vulnerability of Medicaid has led the Government Accountability Office (GAO) to designate it a “high-risk program” that is easily subjected to fraud and abuse. The leading witness at the hearing was John Hagg, the Office of Inspector General (OIG) Director of Medicaid Audits. Hagg’s testimony focused on three specific areas in need of corrective action within the Medicaid program including: (a) terminated providers continuing to participate and bill Medicaid; (b) inadequate safeguards to prevent fraud in personal care service; and (c) lack of State Medicaid Fraud Control Units in U.S. territories.
Terminated Providers. Under the Affordable Care Act (ACA), a State must terminate a provider’s participation in their Medicaid program if the provider was terminated from another state Medicaid or Medicare program. CMS established a centralized database that allows State Medicaid agencies to voluntarily report those providers they have terminated for cause from their programs. Agencies may also use the CMS database to retrieve information about providers who were terminated for cause by other State Medicaid programs. However, twelve percent of providers terminated in one State continued to participate in other States’ Medicaid programs. The reasons for this included the fact that some State Medicaid agencies were not reporting to the database and not all of the submitted records met the CMS definition of a for cause termination. A complicating problem was that 25 States that used Medicaid managed care did not require participating providers to directly enroll with the state Medicaid agency, meaning that if the provider was never enrolled, then they couldn’t be terminated. To address these issues, the OIG has called upon CMS to: (1) require each state Medicaid agency to report all providers terminated for cause; (2) ensure that the shared information contains only records that meet CMS’s criteria for termination for cause; (3) work with states to develop uniform terminology to clearly denote terminations for cause; and (4) require that state Medicaid programs enroll all providers participating in Medicaid managed care.
Personal Care Services. Personal care services including bathing, light housework, or meal preparation, allow many elderly or disabled people to remain in their homes instead of residing in a nursing facility or other institutionalized care setting. Eligible beneficiaries can receive these services under State Medicaid plan options or waivers. The services are typically performed by care attendants and must be provided at home or another approved location and follow a specific plan of care. OIG has conducted numerous investigations and issued many reports related to personal care service fraud. The OIG has found that many payments for personal care services were improper because services were: (1) not provided in compliance with state requirements; (2) unsupported by documentation; (3) provided during periods in which the beneficiaries were institutionalized; and (4) provided by attendants who did not meet state qualifications. Existing program safeguards, intended to prevent improper payments and ensure patient safety and care quality, have often been ineffective. The OIG called upon CMS to:
- Create consistent qualification standards for care attendants.
- Require care attendants enroll or register with the State and list dates, times, and attendants’ identities on Medicaid claims.
- Expand federal requirements to reduce the variation in the requirements for claims documentation, beneficiary assessments, plans of care, and supervision of attendants across
- Issue guidance to States regarding adequate prepayment
- Assess whether additional controls are needed to ensure that personal care services are allowed under program rules and are
- Provide States with the data to identify overpayments when beneficiaries are receiving institutionalized
Medicaid Fraud Control Units (MFCUs). State MFCUs serve the primary role in the investigation and prosecution of Medicaid provider fraud and patient abuse or neglect in health care facilities operating in 49 States and the District of Columbia (excluding North Dakota). MFCUs have a total staff of 1,957 people and spend over $235 million in both Federal and State funds. However, there is a major barrier to establishing a MFCU in Puerto Rico and the other U.S. territories related to the Medicaid funding for territories. Puerto Rico, the territory with the largest Medicaid program by far, is a particular concern with evidence of a considerable fraud and abuse problem. Unlike Medicaid funding for the 50 States and the District of Columbia, the territories receive a capped appropriation to provide both Medicaid services and most administrative costs including operation of a MFCU. This results in a significant obstacle to resource allocation for the establishment and operation of a MFCU. The OIG calls for legislation that could remove the disincentive to establishing MFCUs in U.S. territories. This could be accomplished by exempting MFCU funding from the capped Medicaid appropriation. OIG believes that such a change would also be cost-efficient, especially in Puerto Rico. Current data demonstrates that MFCUs generate positive returns on investment. Puerto Rico officials have expressed interest to OIG in establishing a MFCU but have not been able to get approval for it.Subscribe to blog