CMS data sharing, aggregation pilots uncover Medicaid provider fraud

CMS data sharing, aggregation pilots uncover Medicaid provider fraud

States and the federal government have been successful in curbing Medicaid abuse by taking a new approach toward analyzing payment errors and by sharing data about providers who file phony claims, according to a report released yesterday by the Government Accountability Office.

The Centers for Medicare and Medicaid Services is conducting two pilots to support states' programs to reduce fraud and abuse by providers in delivering health care to low-income Americans. GAO's report described state and federal efforts to reduce improper payments in the Medicaid program. CMS is an agency of the Health and Human Services Department.

Violations that cost states and the federal government typically fall under billing for services that were not provided, kickbacks and coding services for higher payments. In some recent cases, 15 clinical labs in one state billed Medicaid $20 million for services that had not been ordered and an optical store falsely claimed $3 million for eyeglass replacements.

'We commend CMS for the actions it has begun to take to address its Medicaid financial management challenges,' the report said. But auditors added that CMS oversight 'may be disproportionately small relative to the risk of serious financial loss' because of staffing and funding constraints. CMS said other offices also participate in oversight and that it expects to hire 100 new Medicaid financial management workers this year.

One pilot in its third year measures the accuracy of each state's Medicaid claims payments. In fiscal 2006, the Payment Accuracy Measurement pilot will become a permanent, mandatory program. The initiative will develop an aggregate measure of states' claims payment errors, as well as error rates for seven health care service areas, such as inpatient hospital services, long-term care service and prescription drugs. The 12 states currently in the pilot reported Medicaid fee-for-service payment accuracy ranging from 81 percent to over 99 percent.

Another pilot is designed to identify providers who are bilking the program by giving state Medicaid officials access to two federal databases and to provider suspension notices and alerts of emerging schemes. In its first year of testing in California, that pilot resulted in $58 million in savings and authorities opening more than 80 cases against suspected fraudulent health care providers. CMS has expanded the data sharing pilot to six more states.

CMS also sponsors a Medicaid fraud and abuse technical assistance group, which meets monthly by teleconference to discuss new data systems, and fraud and abuse detection tools. This forum allows group members, two Medicaid representatives from each of the nation's four regions, to alert one another to emerging schemes.

About the Author

Mary Mosquera is a reporter for Federal Computer Week.

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