Medicaid analytics deal in Texas raises eyebrows

The Texas state office responsible for countering Medicaid fraud is on the verge of signing a $90 million contract with an analytics firm that has limited experience with the program, according to the Austin American-Statesman.

The Inspector General's Office for the Texas Health and Human Services Commission is making a deal with 21CT, a federal defense contractor and "virtual unknown" in the Medicaid anti-fraud world before 2012, the newspaper noted. That's when Texas officials asked the company to analyze data related to billions in annual Medicaid spending.

21CT's solution offers graph pattern analysis and "focuses on any data analytic challenge in any domain," a company spokesperson told the newspaper. The solution is expected to improve case management and prioritization. However, Medicaid data need extensive grooming before they're fit for consumption, the Statesman noted, and 21CT has no experience in analyzing Medicaid data aside from its 2012 Texas contract.

Further, the pending deal comes amid criticism of the state inspector general's office, which has more than 1,100 open Medicaid fraud cases taking an average of three years apiece to close, the Associated Press reported.

Though the Texas OIG supposedly identified $1.1 billion in Medicaid overpayments between 2012 and 2013, the agency recouped only $5.5 million in that time period. Further, program officials misused their authority to freeze Medicaid payments to providers for whom the state reportedly had credible evidence of healthcare fraud, auditors found. The Texas OIG imposed payment holds too zealously, using them against providers who didn't present significant financial risk to Medicaid, as FierceHealthPayer: AntiFraud reported.

The head of the agency, Inspector General Douglas Wilson, recently came under fire over the issue of an actuary who admitted falsifying numbers used to bring cases against alleged criminals, the AP noted.

In light of the agency's performance record, "investment in Medicaid data analytics could be a double-edged sword," the Statesman reported. There are questions about whether it's advisable to entrust a costly analytics project to an office described as "broken" by the Sunset Advisory Commission, the state legislative panel that recommends corrective action for dysfunctional agencies.

For more:
- here's the Austin American-Statesman article
- read the AP article

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