57% of Improper Medicaid Payments Due to TPL Identification Issues

28 Jul 57% of Improper Medicaid Payments Due to TPL Identification Issues

With the increased awareness that government officials have paid to the need for accurate Medicaid claims information within federal government healthcare systems, one may have expected that now, nearly two years since an inspector general testified that much of the data used to identify improper payments and fraud is not “current, available, complete, [or] accurate”, the issues would certainly be tended to and the federal government’s records rendered more reliable. However, although progress may have been advanced, cracks in state Medicaid programs continue to emerge. Just two weeks ago, the Department of Health and Human Service’s Office of the Inspector General (“HHS-OIG”) released a document regarding flaws in the “Medicaid Interstate Match” program, which is intended to minimize incorrect Medicaid payments by identifying patients that are enrolled in the Medicaid programs of more than one state. Even though the report doesn’t specifically suggest that challenges in the Medicaid Interstate Match program will necessarily impair fraud investigations or result in the targeting of lawful Medicaid participants, it yet again draws attention to the fundamental issues that exist in utilizing data mining in the federal healthcare system.

As the document from the HHS-OIG identifies, the Medicaid Interstate Match is part of a more comprehensive data collection program (the so-called “Public Assistant Reporting Information System,” or “PARIS”) that utilizes Medicaid application records so as to determine if the same individual is receiving federal healthcare benefits from more than one provider or from more than one state. The Medicaid Interstate Match particularly could assess cases where individuals remain enrolled in a given state’s Medicaid program despite the fact that they have relocated to a different state and are acquiring benefits from that second state’s program. Although a beneficiary’s receipt of money from more than just one state’s program often arises from a failure to promptly report a change in address, rather than from an intention to defraud, the “Interstate Match” program can nevertheless save the Medicaid program significant amounts of money that beneficiaries are actually not eligibled to obtain. Accordingly, since October 1, 2009, the Social Security Act mandated every state to participate in the Medicaid Interstate Match, and the Centers for Medicare and Medicaid Services (“CMS“) is responsible for issuing guidelines involving such involvement.

Nevertheless, as the HHS-OIG revealed in its document, the engagement of the various states in the Medicaid Interstate Match program is actually considerably limited. Undoubtedly, of the 4 steps that HHS-OIG has determined as constituting “participation” in the Medicaid Interstate Match (strikingly, CMS has not itself previously described the term “participation,” even though such participation is a pre-requisite for acquiring federal funding), some of those steps in fact are not taken. As an example, whereas state involvement in the Medicaid Interstate Match requires that a state submit its enrollment information so that data can be matched with that from other states, HHS-OIG identified that, for a sample 3 month period (the Medicaid Interstate Match administered on a quarterly basis), 14 states didn’t forward Medicaid registration records for all of their enrollees, and with regard to those 14 states, on average only 46% of the pertinent data was supplied. As another example, in order for the Medicaid Interstate Match program to perform a meaningful role in identifying incorrect benefits payments, information that seems to signify a match among beneficiaries in more than one state needs to be validated, in order to confirm that there is not a “false positive.” Nevertheless, the HHS-OIG report determined that the states did not verify nearly 70 percent of the matches that were identified, partially because the enrollment information submitted by the states was actually inadequate. Because of these and other flaws, the HHS-OIG report reveals that for the three-month time frame under examination, not a sole improper Medicaid payment was actually recuperated through the use of the Medicaid Interstate Match.

Exactly what is one to make of HHS-OIG’s document relating to the failings of the Medicaid Interstate Match? Primarily, there is the rather anti-climactic or even obvious determination reached by HHS-OIG, which is that “CMS should issue guidance to states on the requirement for participating in the Medicaid Interstate Match.” Sensibly, perhaps, CMS “concurred” with this guidance.

More vital, though, are two findings which could be of particular significance to individuals that practice inside the healthcare fraud arena. First and foremost, HHS-OIG details in its document that, according to CMS, “5.8 percent of all Medicaid payments made in fiscal year 2013 were improper, representing $14.4 billion in Federal expenditures.” The federal government frequently mentions such substantial figures as evidence of epidemic fraud, waste, and abuse that purportedly exists in federal government health care programs. Yet in point of fact, the HHS-OIG report presents some much needed perspective, indicating that 57 percent of the “improper” Medicaid payments come from more prosaic, mundane issues, including the “eligibility errors” that arise when a patient moves from one state to another and doesn’t supply Medicaid with a change of address. Fraud in the Medicaid program may well still be a dramatic issue, but when “improper payments” are the outcome of such “eligibility errors” as opposed to fraud, the true scope of the challenge can better be recognized.

Second, despite the fact that the Medicaid Interstate Match is meant to detect eligibility mistakes as opposed to fraud, the defects in the collection as well as utilization of Medicaid information continue to reinforce considerable concerns. As this blog post has noted, reliance upon imprecise data as well as flawed methodology can lead to inculpable participants in the health care system being subjected to expensive, lengthy, and sometimes ruinous audits and inquiries. Additionally, while initiatives to correct data inaccuracies and address issues in program execution may in some cases have an useful effect, systemic problems associated with the size of the Medicare and Medicaid programs, the nature of the administrations that encompass them, as well as the challenge of synchronizing federal-state interactions in such a complicated area could make it impossible for health care data mining to ever be a fully reliable source of analytical decisions. For the regulatory authorities, auditors, investigators, and prosecutors that rely upon government data when establishing whether or not to bring their power to bear upon individuals who are the subjects of expensive and burdensome health-care investigations, all of these issues should very carefully be considered in the balance.