Michigan Audit Uncovers $160 Million in Improper Home Care Payments
July 10, 2014 03:37 PM
A state audit released this month found that Michigan improperly spent over 18 percent of total federal and state expenditures on the state’s Medicaid Home Help Program - $160 million out of $894 million in total expenditures from October 2010 through August 2013. Michigan may be required to pay almost $97 million back to the federal government.
Improper payments included:
$6.8 million in overpayments to 80 agencies that did not provide adequate documentation to secure higher fees compared to individual aides;
$2.6 million in payments for home services while the alleged beneficiaries were hospitalized;
$3.3 million in payments to clients not deemed eligible for receipt of services; and
$0.9 million in payments for home services while the alleged beneficiaries were in nursing homes
The audit also found that almost 3,800, or almost 6% of the state’s home care workers, were convicted of felonies. Of these, approximately 600 were violent crimes, 300 were sex-related crimes, 1,100 were financial crimes, and 2,000 were drug-related crimes.
The Role of Home Care Providers
Generally, while the audit did not explicitly accuse home care providers of fraud, it stated that there was greater risk of both provider and client fraud due to the Department of Human Services adult services workers in the program failing to properly verify that services had been rendered. The audit did find home care providers at least partially to blame in some areas, mentioned below. The audit unfortunately did not indicate the extent to which the findings relate to agency providers versus individual providers. The only exception is the $6.8 million in overpayments, which is from agency providers not having on file all the required documentation to be an approved agency provider.
Improper payments due to hospitalization. Regarding the $2.6 million in improper payments for home services due to beneficiaries being hospitalized, the audit found that documentation did not show that providers notified the adult services workers of their clients’ hospitalizations. Providers had also indicated on 24 out of 25 available service logs that they were providing services to their clients on days that the latter were in fact hospitalized.
Improper payments due to nursing home institutionalization. Regarding the $0.9 million in improper payments for home services due to beneficiaries being in nursing homes, the audit found that case records did not show that providers notified the adult services workers of their clients’ institutionalization in nursing homes.
Suspected provider fraud. According to the audit, adult services workers failed to refer $2,700 of what they identified as suspected provider fraud for investigation.
Service logs. Providers were also found to submit 28.1% of their monthly provider service logs late, and sometimes the providers did not sign the logs. The audit recognized that providers lacked an incentive to submit timely provider service logs, as the state currently pays providers monthly regardless of whether or not they submitted the logs in a timely fashion.
Two years ago, Michigan enacted a law that banned unions from collecting dues from home health care workers. The law ended funding for the Michigan Quality Community Care Council (MQC3) that mandated such workers join SEIU, and also ended an optional registry which required background checks for workers that registered. Patrick Wright, vice president of legal affairs at the Mackinac Center for Public Policy, stated that the intent of MQC3 was not to safeguard beneficiaries by enacting background checks, but rather to perpetuate union dues.
Due to the audits findings, the Michigan Department of Community Health plans to enact new background check policies, which will include enumerating crimes that would disqualify a person from working in the Medicaid Home Help Program.
For the complete story, click here, here and here. For the original audit, click here.
The National Council on Medicaid Home Care – a NAHC affiliate - supports federally funded background checks and a national registry system. Federal and state background check requirements should not be duplicative. Any new requirement should not impose burdensome supervisory requirements on home care agencies while a background check is pending and must protect providers from liability during a provisional period of employment. Further, it should mandate that agencies be adequately reimbursed for the cost of the background checks. For details, see pages 53 and 54 of the Council’s 2014 policy blueprint, here.