OIG report: Washington needs better policies for suspending providers with credible allegations of fraud

From March 2011 through September 2013, Washington failed to suspend Medicaid payments to 48 providers being investigated for credible allegations of fraud, according to a report from the Office of Inspector General (OIG).

As of March 25, 2011, federal regulations enacted through the Affordable Care Act require state agencies to suspend payments to providers as soon as there is a credible allegation of fraud. However, an OIG review of the Washington Health Care Authority (WHCA) and the Washington State Department of Social and Health Services (DSHS) found that 48 providers had not been suspended from Medicaid following that allegation.

Although investigations by the state's Medicaid Fraud Control Unit ultimately determined that there was insufficient evidence of fraud for 47 of those providers, the OIG indicated that the state continued making nearly $1 million in Medicaid payments while the investigations were underway, a violation of federal law. A fraud investigation of one additional provider was ongoing as of October 2014, but the state had continued to make payments totaling more than $1,500.

The OIG determined that the WHCA did not follow its written policies and procedures pertaining to suspended payments, and that DSHS did not have any written policies concerning credible allegations of fraud. The watchdog agency recommended that the WHCA develop and/or follow policies that require the state to suspend Medicaid payments during a fraud investigation.

Reports showed that in 2012, Medicare paid more than $6 million to physicians that were indicted or charged with fraud, or entered into false claims settlements. In June, the Government Accountability Office told Congress that the Centers for Medicare & Medicaid Services needed to do more to prevent improper payments after a report showed that four states made $2.8 million in Medicaid payments to 90 physicians with a suspended license.

On the other hand, officials in New Mexico came under fire over the last year for prematurely cutting off Medicaid funding to 15 behavioral health providers following suspicions of fraud. This led to the passage of a new bill that would require government officials to provide credible allegations of fraud before cutting of Medicaid funding.

For more:
- here's the OIG report