New NCSL Webinar Medicaid Fraud Abuse.pptx [Read-Only] · 2012. 3. 20. · 5 ACA: Preventing Inappropriate Claims Payment • Application Fee: Institutional providers and suppliers

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Containing Medicaid Costs: State Strategies to Fight Medicaid Fraud and Abuseto Fight Medicaid Fraud and Abuse

March 19, 2012

Today’s webinar will cover:

Overview & Impact of the ACAOverview & Impact of the ACANew York State ExampleNew York State ExampleTexas State ExampleTexas State Example

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Patricia MacTaggart

PresentersPresentersPatricia MacTaggartLead Research Scientist, The George Washington University

Mark Hennessey Assistant Medicaid Inspector General for Legislative and Intergovernmental Affairs , New York State Office of the Medicaid Inspector General

Jack StickDeputy Inspector General of Enforcement, Texas Office of the Inspector General

Containing Medicaid Costs: Containing Medicaid Costs: State Strategies to Fight State Strategies to Fight

M di id F d Ab dM di id F d Ab d

Patricia MacTaggart,Lead Research Scientist [email protected]

Medicaid Fraud, Abuse and Medicaid Fraud, Abuse and Payment ErrorsPayment Errors

gg @g202-994-4227

NCSL Webinar 3/19/12

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Medicaid Program Integrity: Fraud, Medicaid Program Integrity: Fraud, Abuse & Payment Errors Abuse & Payment Errors

• Additional Opportunities, Requirements and Resource Demands

• Challenges of Evolving Environment:– New Entities: ACO – Health Homes– New Delivery & Payment Options: Self-

DirectedN D t & D t S C i f– New Data & Data Sources, Conversion of Data & Potential Loss of Old Data

• Approach: Preventing – Not Just Recovering

ACA: Provider ParticipationACA: Provider Participation

• Termination of Individuals or Entities:– Medicaid must if terminated under Medicare or any other state

Medicaid– Medicare may if terminated by Medicaid– Regulation includes CHIP– http://edocket.access.gpo.gov/2011/pdf/2011-1686.pdf– http://www.cms.gov/CMCSBulletins/downloads/6501-Term.pdf

• Termination: provider's billing privileges revoked, provider has exhausted all applicable appeal rights or the timeline for appeal has expired, and no expectation that the revocation is temporary.

• CMS Secure Web-based Portal : States download information regarding terminated providers and to upload information regarding own terminations effective 1/1/11

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ACA: Provider ParticipationACA: Provider ParticipationType of Screening Limited Moderate High

Verification of any provider/supplier-specific requirements established by Medicaid/CHIP

x x x

Conduct license verifications (may include licensure checks across State lines)

x x x

Database Checks (to verify SSN and NPI, the NPDB, licensure, a HHS OIG exclusion, taxpayer identification, tax delinquency, death of individual practitioner, and persons with any ownership or control interest or who are agents

i l f th id )

x x x

or managing employees of the provider) Unscheduled or Unannounced Site Visits x xCriminal Background Check xFingerprinting x

ACA: Suspension of Payments Pending ACA: Suspension of Payments Pending Investigations of Credible Allegations of FraudInvestigations of Credible Allegations of Fraud

• State Failure to Suspend Payments: Medicaid FFP not available if a State has failed to suspend payments when there is pending ana State has failed to suspend payments when there is pending an investigation of a credible allegation of fraud against the individual/entity, unless the State determines good cause (criteria set by CMS) (3/5/11)– States Flexibility: to determine “credible allegation of fraud”– Human Error Billing Errors: not typically rise to level of fraud

MCO bj t t t i b d di– MCOs: subject to payment suspensions based upon a pending investigation of a credible allegation of fraud

– Exception: emergency item or service, not including items or services furnished in an emergency room of a hospital

– http://www.gpo.gov/fdsys/pkg/FR-2011-02-02/pdf/2011-1686.pdf– http://www.cms.gov/CMCSBulletins/downloads/payment-suspensions-info-bulletin-3-

25-2011.pdf

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ACA: Preventing Inappropriate Claims PaymentACA: Preventing Inappropriate Claims Payment

• Application Fee: Institutional providers and suppliers

• Temporary Moratoria: Ability for state to impose temporary moratoria to prevent or combat fraud, waste, and abuse of new providers/provider types

• Home Health Provider Face-to-Face Encounter (telehealth allowed): Required with patient prior to ordering home health ) q p p gservices, medical supplies, equipment or appliances.– Conducted by physician, nurse practitioner /clinical nurse

specialist working with the physician, certified nurse-midwife, or physician assistant under physician supervision

– http://www.cms.gov/CMCSBulletins/downloads/09-08-2010-Home-Health.pdf

ACA: Preventing Inappropriate Claims PaymentACA: Preventing Inappropriate Claims Payment• Recovery Audit Contractors (RACs): audit payments to

identify/recover provider overpayments/underpayments.– State Medicaid programs to have RAC programs by 12/31/10.

Medicaid RACs Final Rule was published 9/16/11– Medicaid RACs Final Rule was published 9/16/11– CPI-CMCS Info Bulletin with FAQs was released 12/30/11

and available on www.medicaid.gov– Medicaid RAC Contingency Fee Federal Register Notice was

published 2/24/12

• National Correct Coding Initiative (10/1/10):– Consists of edits, definitions of types of claims subject to the

edits, claims adjudication rules for applying edits, and rules for addressing provider/supplier appeals of denied payments for services based on the edits

– http://www.cms.gov/smdl/downloads/SMD10017.pdf

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ACA: Preventing Inappropriate Claims PaymentACA: Preventing Inappropriate Claims Payment• Recovery Audit Contractors (RACs): audit payments to

identify/recover provider overpayments/underpayments.– State Medicaid programs to have RAC programs by 12/31/10– http://www. Proposed Rule CMS-6034-P: funding, payment, appeals & coordination

with other efforts – cms.gov/CMCSBulletins/downloads/11-09-2010-Recent-Developments.pdf

• National Correct Coding Initiative (10/1/10):– CMS program that consists of edits , definitions of types of

claims subject to the edits, claims adjudication rules for applying edits, and rules for addressing provider/supplier appeals of denied payments for services based on the edits

– http://www.cms.gov/smdl/downloads/SMD10017.pdf

Medicaid Integrity ProgramMedicaid Integrity ProgramMedicaid Integrity Contractors Medicaid Integrity Contractors

• CMS Contracted Entities: Review provider claims– Review provider claims

– Audit providers and others – Identify overpayments– Educate providers, MCOs,

Enrollees and Others

• Three types of MICs: Audit, review, education

• [email protected]

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Resources NeededResources Needed

• Human Resources:– Skill Sets: Analytical & Clinical

• Information Technology:– Statewide Enterprise Technology (look at

MH/SA/Medicaid/State Employees/Managed Care/FFS)– Standardization of Data Elements – Interfaces with Medicare Data Bases Other StatesInterfaces with Medicare, Data Bases, Other States,

Attorney General Office– Applications to screen claims and review “encounters”

and look at them differently

Challenges of Evolving Challenges of Evolving EnvironmentEnvironment

• New Entities: ACO – Health Homes

• New Delivery & Payment Options: Self-Directed

• New Technologies & New Focus Areas of Concern: Children imaging

• New Data & Data Sources:– Conversion of Data: “encounter” data- not just MCOs– Potential Loss of Old Data: ICD-10– New Interfaces: federal and state death records & other

data bases

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Approaches using eApproaches using e--Health for PreventingHealth for PreventingNot Just RecoveringNot Just Recovering

• Identification:– Looking for Trends: Prepare for prospectively looking

differently rather than retro as there will be no previous trendsdifferently rather than retro as there will be no previous trends for new coverage, new service types (health homes) and trends as a result of ICD-10 Conversion

– Identity Management (Individual, Entity & Patient) : Leverage Health Information Exchange (HIE) & Health Insurance Exchange (Exchange)

• Communication & Management:– Privacy and Security: Identity Theft – Leverage HIE and/or Exchanges: provider directories, record

locator, “hub”, secure messaging, consumer friendly web portal , interfaces with multiple data bases

Fraud and Abuse:A New York PerspectiveA New York Perspective

Mark HennesseyAssistant Medicaid Inspector General

New York State

Fighting Fraud. Improving Integrity through a Cooperative Approach. Saving Taxpayer Dollars.

New York State Office of the Medicaid Inspector General

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OMIG Mission

Our mission is to enhance the integrity of the New

OUR MISSION

York State Medicaid program by preventing and detecting fraudulent, abusive and wasteful practices in the Medicaid program and

recovering improperly expended Medicaid funds while promoting high‐quality patient care.


Achieving the MissionGreat leadership:

Governor Andrew M. CuomoMedicaid Inspector General Jim C. Cox

Advanced Tools:Cutting‐edge data analysis andCutting edge data analysis and visualization tools

Industry leading practices:TransparencyComplianceData miningInvestigationsAuditsCost‐saving activities


Cost saving activitiesHolistic Subject Matter Analysis

Terrific staffPartnerships with the program integrity community in New York and beyond

That includes you!

Governor Cuomo

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Independent MIG

New York created a Medicaid Inspector G l b t t t i 2006General by statute in 2006

Independent office

Close to 600 employees

Offices from Long Island to Buffalo(and in between)


(and in between)

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NY Medicaid Inspector General

Medicaid Inspector General: James C. Cox

Former Regional Inspector General for the HHS Office of the Inspector General

Two decades of Medicaid


auditing experience

Auditor by training James C. Cox

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Holistic Approach

• Consistent application of protocols and guidance

• Accurate citations

• A fair approach

• A better result


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Who is Involved?

OMIGregulating

agencies, law enforcement

providers,provider associations,managed care plans

enrollees


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How does New York find fraud and abuse?


Identifying Cause and Effect

Learn about provider’s business processes

Perform root cause analysis:Identify cause of concernWork to correct problems where they exist

Review information supporting a claim:


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Review information supporting a claim:Consider presented evidence of whether service was provided(e.g. medical records)

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Looking at What Matters

Focus on fraud:Look for providers who are committing fraudLook for providers who are committing fraud

Change approach to improve integration of targeted data mining and risk analysis not just high billing

Balance this approach with maintaining access to services:


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Key part of what we do

New Tools Example

In late 2011, OMIG undertook a new type of i I t V ifi ti R ireview: Inventory Verification Reviews

Pharmacist buys pharmaceuticals from wholesalers in order to dispense

A i t ifi ti i h t


An inventory verification review compares what was claimed on the Medicaid program with what was purchased from a wholesaler

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Analyzing Results

A team led by a pharmacist investigator is in h f l i ltcharge of analyzing results

Data miners compare and calculate variances

If a variance is significant, it can be for only two reasons:

Phantom billing


• Phantom billing

• Drug diversion

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In Progress

Field work on seven reviews so far

One final action concluded, one coming in the next two weeks

Focus has been on fast action for bad actors − first review was completed in four months


four months

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Success

Brooklyn pharmacistsThree excluded pharmacistsBrooklyn pharmacists

scammed $393,000 from Medicaid: state

KENNETH LOVETT , TINA MOORE

Saturday, March 03, 2012

A Sunset Park drug store and three pharmacists have to pay the stateback hundreds

of thousands of dollars for bogus Medicaid bills, the Daily News has

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Almost a half million recovery from one fraudulent pharmacy


of thousands of dollars for bogus Medicaid bills, the Daily News haslearned. RBS Group Inc. (Premium Pharmacy) pharmacists JamesLau, Chris Chang and Johnny Jian Q. Luo, have to return more than$393,000, the Medicaid inspector general’s office said Saturday.

The three also face possible prosecution for Medicaid fraud, astatement from the office said.

“Submitting a false claim isn’t just bad record‐keeping, it’s fraud,”Acting Medicaid Inspector General James Cox said.

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Better program integrity

Fraud and Abuse:A New York PerspectiveA New York Perspective

Mark Hennessey

Assistant Medicaid Inspector General

New York State


e o State

Office of the Medicaid Inspector General

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Texas Approach to Texas Approach to Medicaid InvestigationsMedicaid Investigations

Jack StickJack StickDeputy Inspector GeneralDeputy Inspector General

Office of the Inspector GeneralOffice of the Inspector General

StaffingStaffingDoubled investigative manpowerDoubled investigative manpower

Divided into regional teamsDivided into regional teams

Regional teams each have field experts; field Regional teams each have field experts; field experts all belong to provider specialty teamsexperts all belong to provider specialty teams

Allows for exchange of ideas and experience; allows Allows for exchange of ideas and experience; allows rapid deployment of investigators into targeted rapid deployment of investigators into targeted initiativesinitiatives

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CAF HoldsCAF Holds

Now identified at Intake phase as well as Now identified at Intake phase as well as f ll l i ti tif ll l i ti tifull scale investigationfull scale investigation

Result: fewer nonResult: fewer non--recoupable dollars recoupable dollars

Model T InvestigationsModel T Investigations

Identify top 25 or top 50 utilizers in Identify top 25 or top 50 utilizers in blblproblem areasproblem areas

Assign teams of investigators to handle all Assign teams of investigators to handle all cases in an initiative area cases in an initiative area

Same investigators same type of caseSame investigators same type of caseSame investigators, same type of caseSame investigators, same type of case

Results: increasing speed and accuracyResults: increasing speed and accuracy

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Initial ResultsInitial ResultsIncreased investigation completion rate >Increased investigation completion rate >2525% % (partial year)(partial year)(partial year)(partial year)

Increased productivity measured by dollars Increased productivity measured by dollars investigated/identified (approx. investigated/identified (approx. 17001700%%))

Decreased time to complete investigation Decreased time to complete investigation 42 42 months in July months in July 2011 2011 vs. vs. 8 8 weeks today weeks today

DMEDME

Statewide sweep of 5,800 DMEsStatewide sweep of 5,800 DMEs

Goal:Goal: Identify clearly fraudulent Identify clearly fraudulent providers while complying early with ACA providers while complying early with ACA requirementsrequirements

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MCOMCO

State shift to managed care State shift to managed care –– 80% of dollars spent 80% of dollars spent th h MCOth h MCOthrough MCOthrough MCO

OIG still has obligations OIG still has obligations –– same as before, as well as same as before, as well as underutilization by MCOsunderutilization by MCOs

View SIUs as farm teams View SIUs as farm teams –– use their resources, train use their resources, train them, cooperate with themthem, cooperate with them, p, p

FTP site for rapid transmission of large quantities of dataFTP site for rapid transmission of large quantities of data

Regular alerts Regular alerts –– providers bad in FFS or one plan are providers bad in FFS or one plan are bad across all plans bad across all plans

Graph Pattern Analysis for Graph Pattern Analysis for Fraud AnalysisFraud Analysis

Pattern Recognition in EBT Trafficking Pattern Recognition in EBT Trafficking g gg gand Provider Integrityand Provider Integrity

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Graph Pattern Analysis in Fraud InterdictionGraph Pattern Analysis in Fraud Interdiction

BenefitsBenefitsIncreases identification ofIncreases identification ofIncreases identification of Increases identification of suspicious activitysuspicious activityIncreases successful Increases successful interdictions of benefit fraudinterdictions of benefit fraudIncreases recoupment Increases recoupment potential from fraudulent potential from fraudulent transactionstransactionsEasy to useEasy to useL ltiL ltiLeverages multiLeverages multi--jurisdictional resourcesjurisdictional resources

What is Graph Pattern Analysis?What is Graph Pattern Analysis?Effective when:Effective when:

There’s more data than a human (or computer, at present) can handleThere’s more data than a human (or computer, at present) can handleRelationshipsRelationships among date points matter more than individualsamong date points matter more than individualsAny single piece of evidence is innocuous, but certain combinations of evidence are Any single piece of evidence is innocuous, but certain combinations of evidence are very threateningvery threatening

Graph Pattern Analysis has been used in intelligence community for:Graph Pattern Analysis has been used in intelligence community for:Graph Pattern Analysis has been used in intelligence community for:Graph Pattern Analysis has been used in intelligence community for:Social network analysisSocial network analysisFinding IEDsFinding IEDsFinding terroristsFinding terrorists

Graph Pattern Analysis provides an easy method to manage massive data quantities across Graph Pattern Analysis provides an easy method to manage massive data quantities across multiple databases to identify suspicious activitymultiple databases to identify suspicious activity

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ScenarioScenario1) Subscriber 1) Subscriber receives a SNAP Card with value of receives a SNAP Card with value of

$600$600

2) Runner 2) Runner goes to retail location where goes to retail location where Subscriber Subscriber is shopping and offers $150 in cash is shopping and offers $150 in cash for for SubscriberSubscriber’s ’s CardCard

3) Runner 3) Runner delivers card to delivers card to Buyer, Card Buyer, Card is sold to is sold to Buyer Buyer for $300for $300

4) Buyer4) Buyer purchases goods frompurchases goods from RetailerRetailer4) Buyer 4) Buyer purchases goods from purchases goods from RetailerRetailer4a) Buyer 4a) Buyer bundles multiple cards and delivers to a bundles multiple cards and delivers to a

secondary buyer or organization, which secondary buyer or organization, which converts to cashconverts to cash

5) Subscriber 5) Subscriber subscribes for a new card and subscribes for a new card and repeats the processrepeats the process

The DataThe DataSNAP transactions SNAP transactions

A reference to a Card and who the A reference to a Card and who the card is issued to (a Subscriber)card is issued to (a Subscriber)Subscriber’s mailing addressSubscriber’s mailing addressSubscriber s mailing addressSubscriber s mailing addressTransaction infoTransaction info

What’s not in the dataWhat’s not in the dataInfo on Runners or BuyersInfo on Runners or BuyersInfo on the transactions between Info on the transactions between Runners and Subscribers, or Runners and Subscribers, or Runners and BuyersRunners and Buyers

Card transactions look like theyCard transactions look like theyCard transactions look like they Card transactions look like they are performed by Subscriberare performed by Subscriber

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Using Graph Pattern Analysis to Find Suspicious BehaviorUsing Graph Pattern Analysis to Find Suspicious Behavior

Look for suspicious subscriber behaviorLook for suspicious subscriber behaviorLook for suspicious usage behaviorLook for suspicious usage behaviorLook for data behavior and…Look for data behavior and……understand how it all interrelates…understand how it all interrelates

There is no way to see this using current systems and infrastructureThere is no way to see this using current systems and infrastructure

Active Approach to Block Card Issuance to Active Approach to Block Card Issuance to Suspicious SubscribersSuspicious Subscribers

Graph pattern analysis helps us gain knowledge soonerGraph pattern analysis helps us gain knowledge soonerExample: using pattern analysis we can catch instances of the same Example: using pattern analysis we can catch instances of the same malicious subscriber being issued a new cardmalicious subscriber being issued a new cardmalicious subscriber being issued a new cardmalicious subscriber being issued a new card

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The First StepThe First Step

Start with a query for suspicious behaviorStart with a query for suspicious behavior

Step Two Step Two –– The Pattern BeginsThe Pattern BeginsUse visual graph analysis helps focus investigationUse visual graph analysis helps focus investigation

Note the suspicious spending at the retail store Note the suspicious spending at the retail store –– card subscribers from card subscribers from Houston are purchasing items at the same store in AustinHouston are purchasing items at the same store in Austin

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Discovery of Suspicious PurchasingDiscovery of Suspicious PurchasingA deeper dive in the highlighted store’s “sales” activity… reveals an odd A deeper dive in the highlighted store’s “sales” activity… reveals an odd behavior in purchases (note amounts circled in red)behavior in purchases (note amounts circled in red)

Note that there are several transactions

all for the same dollar amount

Note that there are several transactions at this store all for

the same dollar amount

Strategic AnalysisStrategic AnalysisGraph pattern matching and strategic views of the data highlights other Graph pattern matching and strategic views of the data highlights other stores with similar suspicious card charging patternsstores with similar suspicious card charging patterns

3. New store

investigation

1. Original Store under investigation

3 e sto eexhibiting same

suspicious pattern of behavior

2. Expanding the scope of the investigationof the investigation reveals other stores

with similar suspicious activity

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Identify Recipients, Cards and LocationsIdentify Recipients, Cards and LocationsSuspicious activity readily traceable to individuals and transactionsSuspicious activity readily traceable to individuals and transactions

QuestionsQuestions

To report waste, abuse, or fraud, visit online at To report waste, abuse, or fraud, visit online at www.hhsc.state.tx.uswww.hhsc.state.tx.usor contact the Fraud Hotline at or contact the Fraud Hotline at 11--800800--436436--61846184

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Questions & Contact InformationQuestions & Contact Information

The webinar archive and power points will be online next week.

www.ncsl.org

Upcoming Webinar: Upcoming Webinar: Medicaid Managed Care Medicaid Managed Care April 20thApril 20th

Staff Contact:Megan [email protected]

Documents

New NCSL Webinar Medicaid Fraud Abuse.pptx [Read-Only] · 2012. 3. 20. · 5 ACA: Preventing Inappropriate Claims Payment • Application Fee: Institutional providers and suppliers