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How to stop Medicaid fraud

by Minden Press-Herald


Not long ago, employees at a Minnesota mental health agency blew the whistle on what they described as years of Medicaid fraud. Officials are still tallying up the damage, but the fraud is estimated to be in the millions of dollars.

Do a Google search for Medicaid fraud in Louisiana, and you’ll find that it’s not just a problem for our neighbors in the north. Medicaid fraud is a problem across the U.S., and that includes Louisiana.

Here in Louisiana, a Prairieville couple started a personal health care business funded solely with Medicaid money. Then they skipped the mandatory training that their workers were supposed to receive to become certified personal care attendants. Not only did this couple bill the Medicaid program more than $7 million, but they put their patients’ lives at risk by assigning them care workers who couldn’t even perform basic life-saving measures.

The Medicaid program is big and complex. It’s ripe for fraud and abuse. It’s no surprise that people are cheating the system. And, in Louisiana, Medicaid is an $8.3 billion program. Dr. Donald Berwick, former administrator of the federal Centers for Medicare and Medicaid Services under President Obama, testified to Congress that 10% of Medicaid spending is fraudulent. That’s $830 million in Louisiana.

We’re struggling as a state right now. We’re talking about making drastic cuts to public services. We ought to be talking about taking drastic measures against Medicaid fraud.

Fraud comes in different forms. Some of it’s easy to prevent. For example, California uses data analytics (the science of using algorithms to examine raw data in order to draw conclusions from the data), similar to that used by credit card companies, to identify provider billing trends and anomalies that indicate fraud, thereby stopping the fraud before a fraudulent claim is paid. Front-end anti-fraud measures like this save more taxpayer money than trying to recover the funds after the fact, sometimes referred to as the “chase-and-pay” approach.

Though technically not fraud, we also need to discourage Medicaid patients from treating emergency rooms like a primary care doctor’s office. We can place community health workers in ER waiting rooms to redirect to private providers those with problems that aren’t really emergencies. Houston’s Memorial Hermann Hospital accomplishes this through the Patient Navigator Program. We can also require copays for emergency care for nonemergencies.

Additionally, we need to ensure that those receiving Medicaid actually are eligible for it. This is a bigger problem than you might think. Pre-enrollment investigations (including background checks) of applicants to make sure they qualify for Medicaid is vitally important.

In Louisiana, Bayou Health is the way most Medicaid patients receive care. Five Managed Care Organizations, or MCOs, administer the program. They pay the doctors and the other providers. The state pays the MCOs a fixed amount per month, per Medicaid patient to manage the patient’s care, and the MCOs pay the doctors and other providers a portion at the fixed per member, per month rate to treat the patient. Those rates are where the money is. Overpayments due to fraud trigger a higher rate, as a Washington state audit of its MCOs shows. The incentive to root out the fraud, or the payments that shouldn’t be made, can be strengthened because each year’s new rates are based on last year’s rates.

Do the math. If we stop just a fraction of the fraud – and there’s probably much more than that – we’d save the state between $150 million and $200 million a year. Think about that. We wouldn’t have to worry as much about how to pay for TOPS. We wouldn’t have to worry as much about how to pay our hard-working teachers. All we’ve got to do is keep a better eye on the Medicaid cash register. Right now, we’re keeping the cash register drawer open and asking people not to help themselves to any money while we go on break. Then we’re paying them for every dollar that’s stolen.

What we also need to do is put more auditors at the state Department of Health and Hospitals, as envisioned by House Bill 89 in the 2016 special session, which failed to pass. We need to give each auditor a desk, a computer and a coffee cup with his name on it. We need to let them know that what they’re going to be doing for years to come is stopping the state from making fraudulent Medicaid payments. And we need to put them to work now.

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