Medicaid contractors need better oversight

Recent audits of Medicaid contractor performance in Maryland and Texas found a hornet's nest of problems that drained program dollars and highlighted the need to keep close tabs on outsourced business.

Case in point: The Medical Care Programs Administration, the agency managing Maryland's $7.6 billion Medicaid program, failed to oversee vendors responsible for billing verification at hospitals, long-term care facilities and insurance companies, according to WatchdogWire.

One of Maryland's Medicaid vendors didn't conduct required audits of hospital records to verify performance of claimed services, the article noted.

MCPA failed to monitor another contractor--paid $1.8 billion in fiscal 2103--that was responsible for determining if hospitals billed for medically necessary care. Further, MCPA failed to review patient accounts at long-term care facilities to ensure payment of credit balances owed to the state.

And MCPA didn't adequately oversee a contractor responsible for enrolling new Medicaid applicants in managed care organizations. This vendor overstated enrollment data on its invoices, the audit concluded. Yet MCPA renewed the company's contract despite recovering a $900,000 overpayment from them, Watchdog Wire reported.

Meanwhile, the Texas Attorney General's office filed a lawsuit against Xerox Corporation, the contractor responsible for reviewing dental and orthodontic Medicaid claims. The state is trying to recoup hundreds of millions of dollars that Xerox allowed for apparently unnecessary care, according to Zach's Equity Research.

The lawsuit alleges Xerox systematically approved payment on behalf of thousands of children who didn't qualify for orthodontic benefits. The state terminated its contract with Xerox prematurely; that contract was worth an estimated $759 million, Zach's reported.

The lawsuit against Xerox is part of a larger investigation of orthodontic Medicaid fraud, the Texas Attorney General's Office announced.

This aligns with a national trend: Medicaid is the main source of dental benefits for about 35 million children, and a growing number of pediatric dental fraud and abuse cases have drawn the eye of the Office of Inspector General, as FierceHealthPayer: Anti-Fraud reported. Some of these cases have been prosecuted by U.S. Attorneys' offices.

For more:
- here's the Watchdog Wire article
- see the Zach's Equity Research article
- read the Texas Attorney General's announcement

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