Hearing highlights troubling gaps in Medicaid fraud prevention

Legislators and government officials met Friday for a hearing to discuss fraud, waste and abuse gaps that still exist within Medicaid, and review six bills that aim to improve the way federal and state entities address improper payments.

In his opening remarks, House  Energy and Commerce Subcommittee Chairman Joe Pitts (R-Pa.) pointed to Medicaid's growing budget, which makes it a target for fraud and abuse, and the fact that Medicaid has made the Government Accountability Office's list of high-risk programs dating back to 2003. Pitts also summarized six bills authored by committee members aimed at closing some of the gaps that allow fraud and abuse to occur:

  • The Ensuring Terminated Providers are Removed from Medicaid and CHIP Act: The legislation aims to prevent banned physicians in one state from billing Medicaid in another state, an issue that was the topic of a recent Office of Inspector General (OIG) report.  
  • H.R. 2446 - Electronic Visit Verification System Required for Personal Care Services Under Medicaid: The bill would require states to have electronic visit verification systems in place for personal care services in an effort to identify improper payments.
  • H.R. 3444 - Medicaid and CHIP Territory Fraud Prevention Act: The bill would encourage U.S. territories to create Medicaid Fraud Control Units (MFCU), an issue idenitified in President Barack Obama's 2016 budget.
  • H.R. 1570 - Medicaid and CHIP Territory Transparency Act: Requires the Centers for Medicare & Medicaid Services (CMS) to report on program expenditures.
  • H.R. 1771: The bill would count portions of income from annuities of a community spouse when determining Medicaid eligibility.
  • H.R. 2339: Redefines how lottery winnings are factored into Medicaid eligibility

Testimony from John Hagg, the director of Medicaid audits at the OIG, focused on terminated providers who continue to bill Medicaid, fraudulent billing associated with personal care services and the lack of MFCUs in U.S. territories. Hagg indicated that states still do not have a comprehensive data source to identify terminations from other states, and more than half of the states enrolled in Medicaid managed care do not required providers to enroll with the State Medicaid agency. A previous report showed that in 2014, as many as 1,800 excluded physicians who were barred in one state submitted claims in another.

Concerning personal care services, Hagg pointed to a decade's worth of reports that identified problems concerning unsupported documentation and non-compliance with state requirements. The OIG has made numerous recommendations to CMS regarding payment controls, claims documentation and personal care assessment, but CMS indicated that more needs to be done at the federal and state level to resolve these ongoing issues.

Finally, Hagg noted that although all U.S. states are required to establish MFCUs in order to identify and prosecute potential fraud schemes, territories within North Dakota and Puerto Rico do not have a MFCU because those areas have a capped budget that is used to provide services and for administrative costs. Hagg recommended exempting MFCU funding, particularly in parts of Puerto Rico, where the OIG has tallied 117 criminal convictions and $12 million in civil settlements since 2012.

For more:
- watch the subcommittee hearing
- read the opening statement from Rep. Joe Pitts
- here's testimony from the OIG's John Hagg

Related Articles:
GAO to Congress: CMS needs to do more to prevent Medicaid fraud
Report: Banned physicians continue billing federal programs
OIG: New Jersey billed $32.2M in improper personal care services
Terminated physicians continue billing Medicaid in different states
GAO adds VA to list of programs at high risk of fraud, waste and abuse

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