In August 2000, the New York City Human Resources Administration informed Scott Fredricks he had been approved for a personal care aide, paid for by a state-funded Medicaid program that allowed individuals with disabilities to receive in-home care. Fredricks, a paraplegic, submitted the required documentation, including a Social Security Number and a passport photo of his aide, a man by the name of Richard Spears.
One problem: Richard Spears didn’t exist. The passport photo that Fredricks submitted to the state was actually him, but for three years he billed the Medicaid program more than $114,000 using the alias, with payments deposited directly to his bank account, according to the New York City Department of Investigation.
Investigators eventually caught on, and Fredricks was sentenced to 21 months in prison following a trial in which independent neurologists suspected he was even faking his paralysis, according to the New York Daily News.
Nearly two decades later, however, very little has changed when it comes to preventing this type of scheme. State Medicaid programs routinely face the same kinds of audacious fraud schemes within the personal care services industry in which both beneficiaries and providers frequently defraud state programs. Despite repeated recommendations from the Office of the Inspector General (OIG), Medicaid programs still lack even the most basic controls to limit fraud.
Earlier this month, the OIG released a new investigative advisory indicating that “persistent compliance, payment and fraud vulnerabilities” still exist within the personal care services industry. The watchdog agency repeated many of the same recommendations it released in 2012 as part of a scathing report that indicated Medicaid personal care services costs had increased 35 percent from 2005 to 2011, exceeding $12 billion. Even four years ago, the OIG noted that “many State Medicaid Fraud Control Units report that the increasing volume of fraud involving PCS has become a top concern,” including many schemes in which aides conspired with beneficiaries to submit fraudulent claims.
In that 2012 report, the OIG also laid out several simple recommendations, calling on the Centers for Medicare & Medicaid Services (CMS) to create minimum federal qualification standards for attendants, require states to enroll attendants as providers or be assigned a unique identifier, improve documentation requirements and provide guidance to states regarding prepayment controls and claims edits.
Christi Grimm, the special assistant to the principal deputy inspector general at that time, told the Center for Public Integrity that CMS had left fraud enforcement to the states, which led to hundreds of disjointed requirements. She argued that more structured federal oversight could help ease fraud vulnerabilities.
“We are asking CMS to step up to the plate,” Grimm, now the OIG’s chief of staff, told CPI in 2012.
It appears CMS declined that invitation. Now, four years later, the OIG reissued those same recommendations.
“OIG believes that CMS needs to take regulatory action to establish safeguards that will prevent fraudulent or abusive providers from enrolling or remaining as PCS attendants and better protect the PCS program from fraud and patient harm and neglect,” this month's report said.
This is a vulnerability that is not going away any time soon. Provisions of the Affordable Care Act have made personal care services even more accessible, and for good reason: In-home care keeps beneficiaries out of costly nursing homes, which is particularly useful for patients who don’t require skilled care. Meanwhile, the Bureau of Labor Statistics indicates personal care aide employment is expected to grow 26 percent from 2014 to 2024, driven by an aging baby boomer generation.
But CMS has very clearly dropped the ball when it comes to oversight, and, as usual, it boils down to a lack of useful data. After all, these fraud schemes are not particularly complex: Most involve personal care aides submitting claims for two or more patients at the same time, or billing for more hours than humanly possible--anomalies Medicaid programs should be able to identify easily. Better screening and enrollment and improved claims processing would provide the data and information required to prevent Medicaid programs from paying fraudulent claims from the get-go.
It’s more than a little dumbfounding that CMS has dragged its heels on this issue despite a decade of audits and reports pleading for simple fixes to a growing problem. Delaying these basic changes another decade will only make a bad situation worse. - Evan @HealthPayer