Iowa's Program Integrity Initiative Yields $86 Million in Savings
November 1, 2013 12:36 PM
On October 21, Governor Terry Brandstad (R) announced that a recently implemented Medicaid program integrity initiative (the Initiative) generated $41 million in taxpayer savings in fiscal year 2013, bringing total savings to $86 million in three years. The Initiative demonstrated a strong return on investment exceeding initial expectations—the three-year contract cost $14 million, and was originally projected to generate only about $67.5 million in savings for that time period.1
The Initiative was conducted by Optum, a Minnesota based health IT company that does most of the Iowa Medicaid’s program integrity work. According to the Director of Iowa’s Medicaid program, Optum found savings both from “cost avoidance,” i.e. avoiding paying fraudulent or otherwise false claims in advance, and recovering funds already inappropriately paid to providers. According to the Governor, “cost avoidance” is more cost effective than “recovery.”
Optum found several common fraudulent or otherwise false claims in its analysis, including in the areas of:
In-home respite care: These are claims that reimburse parents of disabled children so that they can run errands while their disabled children receive in-home non-medical services. Common questionable claims included: providers billing for services not rendered, double billing for two households, and overbilling time.
Chores: These are claims from chore providers administering services, which include snow removal and lawn mowing, for those receiving home and community-based services. Common questionable claims included: overbilling hours and amount of reimbursement, and for billing for snow removal on non-snow days.
The Initiative also contains an “educational component” to educate providers on proper billing.
To see the Governor’s press release, click here. To see news articles on the press release, click here and here.
It can be anticipated that investigations and prosecutions will continue for some time to come as states share information and strategies. Home care companies doing business with Medicaid would be well served if they redouble their internal program integrity efforts. Home care companies should utilize service attendance and documentation systems that provide reliable ways to validate any self-submitted information. Further, agencies should engage in at least spot checks with recipients to ensure actual delivery of care and continued eligibility for services. In many circumstances, Medicaid will attempt to recover any fraudulent payments from the agency even if the agency is not implicated in the fraud.
Additionally, the fraud of an employee can create a risk that the employer is also charged with fraud.
Home care companies should be aware that despite increased enforcement efforts, individual caregivers continue to face allegations of Medicaid fraud, primarily focused on billing for services not rendered. These trends have contributed to a movement to require background checks for caregivers, and stakeholders should actively engage in that process through the forums or state advocacy.
It appears that the concerns with billing for services never rendered are especially acute in consumer-directed care programs. While these types of home care delivery models provide an important level of control to the client, they also run a higher risk of fraud, particularly where the caregivers are from the client’s family. These risks may provide home care agencies with an opportunity to supply some program integrity oversight along with caregiver training and supervision. At the same time, agencies should guard against Medicaid programs promulgating new regulatory measures that affect agency-model and consumer directed care equally.
Home care companies are encouraged to keep abreast of program integrity initiatives in their states, and to contact the Council with any questions or concerns.