AMARILLO, TX – Program integrity activities are meant to ensure that federal and state taxpayer dollars are spent appropriately on delivering quality, necessary care and preventing fraud, waste, and abuse. Program integrity responsibilities are shared between states and the federal government. Contracted managed care organizations also have specific program integrity responsibilities.

Overview of Medicaid State Program Integrity Functions

All state Medicaid programs, regardless of delivery system design, must comply with federal Medicaid program integrity requirements. For example, states must have mechanisms to identify, investigate, and refer suspected fraud and abuse cases to appropriate state and federal law enforcement and cooperate with federal program integrity initiatives including the Medicaid Integrity Program and the Payment Error Rate Measurement (PERM) program (42 CFR Part 455). In addition, most states have a Medicaid Fraud Control Unit (which operates independently from the Medicaid program) to investigate and prosecute Medicaid provider fraud, including fraud committed by providers under contract to Medicaid managed care plans.

We will use the State of Missouri’s Medicaid program integrity unit as an example of a typical state’s Medicaid program integrity department.  In Missouri, the Missouri Medicaid Audit and Compliance Unit (MMAC) is responsible for the oversight and the auditing of compliance of the Missouri Medicaid providers and participants.  The MMAC is charged with the responsibility of detecting, investigating, and preventing fraud, waste and abuse of the Missouri Medicaid Title XIX Program.

Organizational Structure of a Typical State Medicaid Program Integrity Department

Typical state Medicaid program integrity units are divided into several organizational components such as Administration, Financial, Provider Review and Lock-In, Investigations and Provider Enrollment.  We will focus our overview on the Provider Review Group.

The Provider Review Group

The Provider Review Group is responsible for reviewing and monitoring statewide utilization and program compliance of Medicaid fee-for-service providers.  The Group conducts post-payment reviews and researches complaints.  Following a review, the Group may issue provider sanctions in accordance with applicable federal and state laws and regulations, including, but not limited to, educational letters, recovery of improperly paid funds, and request for a corrective action plan.  The Group is responsible for detecting and identifying patterns of provider fraud, reviewing provider records, claims and payments to determine whether fraud, waste and abuse exists.

The Group is responsible for referring suspected fraud cases to the MMAC Investigations Group for further and full investigations. The Group is also responsible for providing information and assistance in developing laws, regulations and policies and procedures for detecting and preventing fraud, waste and abuse of the Missouri Medicaid Title XIX Program.

The Provider Review Group and Claims Processing

Upon a provider submitting a claim electronically, the claim goes through a series of edits, including:

• Data validity
• Participant eligibility and third party liability
• Provider eligibility and pricing
• History checking including medical criteria
• Prior authorization
• Certification
• Pre-payment review (medical consultant review)

The Provider Review Group and Post-Payment Review

Providers are selected to be reviewed from either referral, exception reports, and/or other system generated reports.  Referrals concerning possible misutilization may be received from providers, participants, consultants, employees, and staff from other agencies.  Exception reports are produced on providers that have exceptional patterns of utilization, or that deviate from established norms.

A review of claims reimbursed is performed on each of the selected providers or project in order to determine program compliance.  This review is completed by either desk review or field review. The appropriateness and quality of service are also considered for the claims being reviewed.  If a question regarding the quality of service, medical necessity or medical interpretation exists, the case is referred to medical consultants for review.

Provider Sanctions/Administrative Actions

The outcome of a provider review may include one more of the following administrative actions:

• Determination of overpayment.
  • If an overpayment is identified, a certified mailing is sent to the provider outlining all errors noted in the review and informing the provider of the total amount overpaid.
  • The provider is also notified of any repayment options available to it.
• Withholding of payments.
• Transfer to closed-end agreement.
• Provider education.
• Pre-payment review.
  • A means by which a provider’s claims are reviewed by medical consultants prior to payment to determine reasonableness and appropriateness of services and charges.  The consultant monitors all claims submitted by the provider for services rendered to Medicaid participants and payment is denied for all incorrectly billed services.
• Referral to another State agency
• Suspension
• Termination

Referrals

As noted above, one possible sanction/administrative action against a provider is a referral to another state agency.  In the case of Medicaid participants, a referral can be made to the lock-in program.  If the review findings question the provider’s license or certification, an appropriate referral is made to Professional Registration.  If the review findings question the provider’s Bureau of Narcotic and Dangerous Drugs prescribing privileges, the appropriate referral is made to the Bureau.  If a question of potential fraud exists, the case is referred to the Office of the Attorney General-Medicaid Fraud Control Unit. Program Integrity staff also review and monitor the utilization of participants.  If participants are found to abuse a program, such as emergency room visits for non-emergency situations, the staff will lock the participant into a specific provider and monitor the utilization very closely.

Program Integrity and Medicaid Fraud Control Units

Most states are required, as a condition to receiving federal Medicaid funds, to operate a Medicaid Fraud Control Unit (MFCU) and Medicaid integrity program.  MFCUs must investigate and prosecute (or refer for prosecution) violations of all applicable state law pertaining to fraud: in the administration of the Medicaid program; in the provision of medical assistance; and by providers of medical assistance under the state Medicaid plan.  If the MFCU discovers overpayments, the Unit must either attempt to collect such overpayment or refer the matter to the state agency for collection.

MFCUs must also investigate/prosecute allegations of abuse or negligence of vulnerable adults in health care facilities receiving payments under the state Medicaid plan, and may review complaints of the misappropriation of a patient’s private funds in such facilities.

The state Medicaid program must refer all cases of suspected provider fraud to the MFCU.  The Medicaid program must also promptly comply with a request to be given access to and be provided free copies of agency records kept by the agency, be provided computerized data (without charge and in form requested by the Unit), and be given access to any information kept by providers which is accessible by the agency.  The state Medicaid program must also initiate any available administrative or judicial action to recover improper payments to a provider upon referral from the Unit.  (MFCU has reciprocal obligation to make referrals).

42 CFR 455.21(a)(1) requires that States refer instances of suspected fraud to their MFCU.  In 2008, the federal Medicaid Integrity Group provided the following “Recommended Standard for Determining Whether a Case Should be Referred to a MFCU”:

The PIU [Program Integrity Unit] should make a referral to its MFCU whenever there is reliable evidence that overpayments discovered during an audit are the product, in whole or in part, of fraud committed by the provider and/or one or more of the provider’s staff or contractors.  Reliable evidence is evidence that has been corroborated, that is based upon information from a person whose relationship with the suspected perpetrator is such that the person could reasonably be expected to have knowledge of the misconduct (such as an employee or ex-employee), or that is based on data analysis that reveals aberrant billing practices that appear unjustifiable based upon normal business practices.

Pursuant to 42 CFR 455.2, “Fraud” means an intentional deception or misrepresentation made by a person with the knowledge that the deception could result in some unauthorized benefit to himself or some other person. It includes any act that constitutes fraud under applicable Federal or State law.

According to CMS, “Corroboration” of suspected fraud can include a wide array of information and materials. Broadly speaking, corroboration often is found in the form of a pattern of aberrant behavior. In the audit setting, examples include significant numbers of clinical notes containing identical descriptions of the services provided, large quantities of missing records without legitimate explanation, documents that show indications of having been tampered with subsequent to the provider receiving notice of the audit, or calendars showing that services were provided for shorter periods than were billed. In

the data analysis setting, examples include data revealing such behavior as a laboratory provider routinely billing an unusual combination of high dollar tests or a physician billing every month for multiple members of a family on the same day using the same office visit procedure code.

CMS stated that the reason behind issuing the “Recommended Standard for Determining Whether a Case Should be Referred to a MFCU” was that many States expressed difficulty in interpreting and applying 42 CFR 455.21(a)(1), which requires States to refer instances of suspected fraud to their MFCU.  In other words, States wanted clarification on the issue of how strong the evidence must be of fraud before the program integrity unit should refer the case to the MFCU.

State Medicaid program integrity departments play an important part in combatting fraud, waste and abuse in the federal/state Medicaid program.  Understanding your state’s Medicaid program integrity unit, its function, organization and personnel can play an important part of your organization’s compliance function.

AAHOMECARE’S EDUCATIONAL WEBINAR

Successfully Moving Into the Retail Market

Presented by: Jeffrey S. Baird, Esq., Brown & Fortunato, P.C. & Todd A. Moody, Esq., Brown & Fortunato, P.C.

Tuesday, February 26, 2019

2:30-3:30 p.m. EASTERN TIME

“Leave it to Beaver” has been replaced by “Modern Family.” The old way of running a DME business no longer works. With competitive bidding, stringent documentation requirements, lower reimbursement, and post-payment audits, Medicare fee-for-service should only be a component of the supplier’s total income stream. There are 78 million Baby Boomers retiring at the rate of 10,000 per day. Boomers are accustomed to paying for things out-of-pocket. And most Boomers want the “Cadillac” product – not the “Cavalier” product – so they can have an active lifestyle well into their 80s. The successful DME supplier will be focused on selling upgrades, utilizing ABNs, and selling “Cadillac” items for cash. These retail sales may take place in a store setting, through a kiosk, or over the Internet.

When selling products for cash, there are a number of requirements that the DME supplier must meet. This program will discuss these requirements, including the following

1. state licensure;
2. selling Medicare-covered items at a discount off the Medicare allowable;
3. obtaining a physician prescription; and
4. collection and payment of sales and/or use tax;
5. qualification as a “foreign” corporation;
6. required notification to a Medicare beneficiary even thoughthe supplier does not have a PTAN;
7. complying with federal and state telemarketing rules.

Lastly, this program will discuss the benefits of setting up a separate legal entity through which the retail business will be operated.

Register for Successfully Moving Into the Retail Market on Tuesday, February 26, 2019, 2:30-3:30 p.m. ET, with Jeffrey S. Baird, Esq. and Todd A. Moody, Esq., of Brown & Fortunato, PC.

FEES:   Member: $99.00; Non-Member: $129.00 

Jeffrey S. Baird, JD, is chairman of the Health Care Group at Brown & Fortunato, PC, a law firm based in Amarillo, Tex. He represents pharmacies, infusion companies, HME companies and other health care providers throughout the United States. Mr. Baird is Board Certified in Health Law by the Texas Board of Legal Specialization, and can be reached at (806) 345-6320 or [email protected].

Markus P. Cicka, JD, is an attorney with the Health Care Group at Brown & Fortunato, PC, a law firm based in Amarillo, Tex. He represents pharmacies, infusion companies, HME companies and other health care providers throughout the United States. Mr. Cicka can be reached at (806) 345-6366 or [email protected]. From 2009 to 2013, Mr. Cicka was Director, Missouri Medicaid Audit and Compliance Unit.]