California Department of Health Care Services

1
California Department of Health Care Services

• Audits and Investigations,
• Medical Review Branch,
• March 2008

2
Audits Investigations Mission Statement

• To protect the fiscal integrity of Californias
  publicly funded health care programs.
• To ensure quality health care services are
  delivered to Medi-Cal Beneficiaries.

3
Medi-Cal Fraud

• Medi-Cal fraud represents a complex and
  multi-faceted problem.
• New fraudulent schemes continue to surface.
• Unscrupulous providers are continually testing
  our ability to identify misuse of the Medi-Cal
  Program.

4
What does fraud look like?

• Fraud presents itself in many forms

• ? Improper use of beneficiary IDs
• ? Providers rendering services that vary from
  norms
• ? Providers billing for services not rendered
• ? Providers exploiting vulnerable populations for
  economic gain
• ? Improper use of provider IDs
• ? Providing services that are not medically
  necessary
• ? Payment of kickbacks to beneficiaries
  (capping) in order to bill Medi-Cal for
  unnecessary services
• ? Failure to disclose true ownership on Medi-Cal
  application (willful misrepresentation)
• ? Up coding to obtain a higher rate of
  reimbursement

5
The Cost of Fraud

• Research confirms that fraud costs the Program a
  great deal.
• Small numbers of beneficiaries can generate
  repetitious billings by providers for enormous
  sums in fraudulent payments.
• Collusion among providers is a popular scheme
  utilized to defraud the Medi-Cal Program.

6
The Cost of Fraud is Significant

• 1,915 beneficiaries during a 12 month period cost
  the Medi-Cal program 67,000,000 in outpatient
  services
• Or, 34,987 per-user
• Or, 2,916 per user-per-month

7
Anti-Fraud Savings

• As a result of Anti-Fraud efforts over 2 billion
  savings since 1999

8
Cumulative Anti-Fraud SavingsJuly 1, 1998
through June 30, 2007

• SAVINGS
• Re-Enrollment
• Withholds
• Temporary Suspensions
• Special Claims Review
• Provider Prior Authorization
• Field Audit Reviews/UC
• Audits for Recovery
• Lab Reviews
• Dental
• BIC Replacement
• TOTAL 1,204,541,873

• COST AVOIDANCE
• Pre-Enrollments
• Lab Enrollment
• Managed Care
• TOTAL 752,415,141
• LEGAL ACTIONS
• Criminal Convictions
• Civil Judgments/Settlements
• TOTAL 138,413,550
• Court Ordered Restitution
• TOTAL 78.9 million

9
Data sharing with CMS

• California was the first state to partner with
  the Federal Centers for Medicare and Medicaid
  Services (CMS) in data-sharing on providers
• Provides more detailed information on suspect
  providers

10
Key Legislation

• AB1699 (2002)
• Added Section 100185.5 to the Health and Safety
  Code and authorizes the Director to deny
  continued enrollment, suspend, or withhold
  payments to a Medi-Cal Provider if they
  duplicate fraud from one program to another or
  have had multiple utilization controls.
• SB 857 (2004)
• Amends several sections of the Welfare and
  Institution Code (WI) adding provisional
  provider status, providing DHCS with the ability
  to levy civil money penalties, collect
  overpayments in a more timely manner, and impose
  procedure code limitations when warranted.
• AB 530 (2006)
• Added Section 14123.05 to the WI Code and
  became effective January 2007. Gives sanctioned
  Medi-Cal providers the opportunity to participate
  in meet confer meetings with DHCS.

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Investigations Branch Investigations, Reviews and
Techniques

• The Investigations Branch (IB) is charged with
  the responsibility to protect the fiscal
  integrity of the Californias publicly funded
  health care programs.
• IB Fraud Investigators are sworn law enforcement
  officers who conduct criminal and civil
  investigations into various Medi-Cal program
  fraud, both beneficiary and providers.
• Medi-Cal Beneficiary Fraud
• Early Fraud Detection Program (EFDP)
• Income Verification Eligibility Verification
  System (IEVS)
• Failure to Report Other Insurance Coverage
• Drug Utilization Enforcement (DUE)
• Social Security Cooperative Disability
  Investigations
• In Home Support Services
• Women, Infants and Children Program (WIC)
• Vital Statistics Investigations

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Allied Agencies

• IB Fraud Investigators work with numerous allied
  agencies, including
• The county welfare departments, eligibility
  workers, social workers, the special
  investigative units (Welfare Fraud Investigators)
  and the county Auditor Controllers Office
• Federal Agencies
• The FBI, Health and Human Services, the Social
  Security Administration, Federal Courts, Housing
  Utilization and Development (HUB) and the Drug
  Enforcement Administration
• State Departments
• The State Controllers Office, Franchise Tax
  Board, Department of Justice, Bureau of Medi-Cal
  Fraud and Elder Abuse, the Bureau of Narcotics
  Enforcement, State Department of Social Services,
  Adult Programs and Fraud Bureau, the California
  Welfare Fraud Investigators Association, the
  California Department of Consumer Affairs,
  Department of Mental Health, Alcohol and Drug
  Program, Department of Development Disabled and
  the Highway Patrol
• City and Local Departments
• Police and sheriff, county grand juries and
  county counsel

13
2007 Payment Error Rate Measurement (PERM)

• The Centers for Medicare Medicaid Services
  (CMS) implemented the PERM program to measure
  improper payments in the Medicaid program and the
  State Children's Health Insurance Program
  (SCHIP).
• PERM is designed to comply with the Improper
  Payments Information Act of 2002 (IPIA Public
  Law 107-300), which requires a report to
  Congress.
• Three contractors perform statistical
  calculations, medical records collection, claims
  review and medical/data processing review of
  selected State Medicaid and SCHIP fee-for-service
  (FFS) and managed care claims.

14
2007 Payment Error Rate Measurement (PERM)

• In FY 2006, CMS reviewed only fee-for-service
  Medicaid claims.
• In FY 2007, PERM was expanded to include reviews
  of fee-for-service and managed care claims, as
  well as beneficiary eligibility, in both the
  Medicaid and SCHIP programs.
• Each state participates in the PERM program once
  every 3 years (17 states per year) on a
  rotational basis. All 50 states are reviewed
  every 3 years.
• California is a year 2 state (2007, 2010, 2013).

15
2007 Payment Error Rate Measurement (PERM)

• Based upon the error rate, states must return
  their Federal share of overpayments within 60
  days.
• CMS published the final rule for PERM on August
  31, 2007, which sets forth State requirements for
  submitting claims and policies to the CMS Federal
  contractors for purposes of conducting
  fee-for-service and managed care reviews. This
  final rule also sets forth the State requirements
  for conducting eligibility reviews and estimating
  case and payment error rates due to errors in
  eligibility determinations.
• The California MPES is the equivalent to the PERM.

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Medi-Cal Payment Error Study (MPES)

• The first MPES was conducted in 2004. DHCS is
  currently conducting the fourth annual MPES.
• The MPES has been conducted yearly. After this
  year, MPES will be conducted every two years.
• This study allows the State to measure the error
  rate of payments for Medi-Cal services and will
  enhance the system used to assure proper payment
  for services rendered to Medi-Cal beneficiaries.

17
Medi-Cal Payment Error Study (MPES)

• The 2007 MPES is a review of a sample of claims
  that were paid between April 1, 2007 and June 30,
  2007 to determine if the documentation of service
  supports the claims submitted for Medi-Cal
  reimbursement.
• The MPES develops an estimate of dollar loss due
  to potential fraud, identifies and quantifies
  program vulnerabilities, and identifies how best
  to deploy Medi-Cal antifraud resources.

18
Evaluation Activities

• Audits for Recovery
• Enrollment Reviews
• Utilization Reviews
• Field Audit Reviews (Pre-Payment)
• Special Projects

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Consequences

• Utilization Controls
• Post Service Pre Payment Audit (SCR)
• Prior Authorization
• Civil Money Penalty (Warning Notices)

• Sanctions/Suspensions
• Withhold
• Temporary Suspension
• Procedure Code Limitation
• Permissive Suspension
• Mandatory Suspension
• Immediate Suspension
• Civil Money Penalty
• (Imposition of Fines)

20
Number of Sanctions Imposed
Type of Open
Cases AFR 46 Biller Reviews
1 Desk Audits 33 Education Reviews
1 Enrollments 54 FAR 133 Referrals
8 Special Projects 10
21
Number of Cases Currently on Sanction
Type of of Sanction
Providers PPA 73 CMP - First Warning
Ltr 748 TS 407 WH 321 SCR 287 PCL 173
According to the Medi-Cal PCL list on Medi-Cal
website there are only 72 providers on PCL
22
Number of Cases on Which Sanctions Were Placed
of Providers 2006 2007 PPA 0 3 CMP-First
Warning Ltr 305 204 TS 70 63 WH 69 34 SCR
196 159 PCL 79 134
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CONTACT INFORMATION

• The DHCS Medi-Cal Fraud Hotline telephone number
  1-800-822-6222
• The recorded message may be heard in English and
  four other languages Spanish, Vietnamese,
  Cambodian, and Russian. The call is free and the
  caller may remain anonymous.
• You can also send an e-mail to
  stopmedicalfraud_at_dhs.ca.gov