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Program Integrity Fraud, Waste


Program Integrity Fraud, Waste & Abuse Sandhills Center LME NC Medicaid Based on its budget, Medicaid is one of the largest health care companies in NC. – PowerPoint PPT presentation

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Title: Program Integrity Fraud, Waste

Program IntegrityFraud, Waste Abuse
  • Sandhills Center LME

NC Medicaid
  • Based on its budget, Medicaid is one of the
    largest health care companies in NC.
  • Serves 1.5 million people annual expected to
    increase by 500,000 700,000 by 2014.
  • Must have a system in place to prevent improper
    payments and reduce fraud abuse.

  • Fraud Deception or misrepresentation made by a
    health care provider with the knowledge that the
    deception could result in some unauthorized
    benefit to him or herself or other person.
    Includes any act that constitutes fraud under 42
    CFR 455, the federal laws governing Program
    Integrity for Medicaid.

  • Waste The over utilization of services, or
    other practices that result in unnecessary costs
    generally not considered caused by criminal
    negligent actions but rather the misuse of

  • Abuse Provider practices that are inconsistent
    with sound fiscal, business or clinical practices
    and result in an unnecessary cost to the Medicaid
    program, or in reimbursement for services that
    are not medically necessary or fail to meet
    recognized standards for health care or clinical

Fraud Abuse Laws
  • False Claims Act Knowingly submits, or causes
    another person or entity to submit, false claims
    for payment of government funds
  • Filing false claims may result in fines of up to
    3 times the programs loss plus 11,000 per claim

Fraud Abuse Laws
  • Anti-Kickback Statute A criminal law that
    prohibits the knowing and willful payment of
    remuneration to induce or reward patient
    referrals or the generation of any business
    involving any item or service payable by any
    federal healthcare program.

Fraud Abuse Laws
  • Self-Referral Law, commonly known as the Stark
    Law Pertains to physician referrals under
    Medicare and Medicaid. This law prohibits
    physicians from referring patients to receive
    services from entities with which the physician
    or an immediate family member has a financial

Fraud Abuse Laws
  • False Claims Act Whistleblower Employee
    Protection Act This law was enacted to protect
    employees from being discharged, demoted,
    suspended, threatened, harassed or discriminated
    against because the employee testifies or assists
    with an investigation of the employer.

Fraud Abuse Laws
  • Exclusion Statute This law explains that the
    Office of Inspector General (OIG) is legally
    required to exclude individuals/entities from
    participation in all federal health care programs
    if convicted of certain offenses.

Fraud Abuse Laws
  • Civil Monetary Penalties Law This law allows
    the OIG to seek civil monetary penalties and
    assessments based on the type of violation.
    Penalties range from 10,000 to 50,000 per

Mission of Program Integrity
  • Ensure compliance, efficiency and accountability
    with the NC Medicaid Program by detecting and
    preventing fraud, waste and program abuse and
  • Detect improper payments of Medicaid dollars
    through cost avoidance activities, recoupments
    and ongoing education of providers and members.

Program Integrity Objective
  • To eliminate fraud, waste and abuse within the
    Sandhills Center Provider Network by implementing
    a proactive data driven process to identify and
    address potential discrepancies and red flags.

Interventions Strategies
  • Provide education, training and/or guidance for
    both Medicaid members and providers of Medicaid
  • Support efforts of providers who identify and
    resolve issues themselves
  • Hold provider agencies accountable when no
    systems are in place to guard against fraud,
    waste and abuse

Interventions Strategies Contd
  • Support use of tools such as payment suspension,
    post payment reviews, audits, and sanctions and
  • Encourage and maintain open lines of
    communication between the program and the public
    on the effectiveness of PI activities, which
    include recoupment and cost reduction.

Interventions Strategies Contd
  • Monitor providers regularly to determine
  • Take corrective action if failure to comply
  • Implement mechanisms to detect under and over
    utilization of services
  • Implement mechanisms to assess quality and
    appropriateness of care
  • Ensure providers are credentialed.

Expected Benefits
  • Enhance Provider Education
  • The shift to a more proactive/preventive model
  • Improved guidance on reimbursement policies
    provider enrollment requirements and
  • Improved detection

Examples of Medicaid Fraud
  • Billing for phantom patients who really did not
    receive services
  • Billing for medical services or goods that were
    not actually provided
  • Billing for more services than could be provided
    in 24 hours in a day
  • Paying a kickback in exchange for a referral for
    services or goods

Examples of Medicaid Fraud
  • Concealing ownership in a related company
  • Using false credentials for staff
  • Providing services by untrained staff
  • Billing for unnecessary tests and/or
  • Overcharging for health care services or goods
    that were provided.

Session Law 2011-399
  • Also known as Senate Bill 496
  • Modified the General Statutes by adding a new
    chapter, 108C titled Medicaid and Health Choice
    Provider Requirements.
  • Applies to providers enrolled in Medicaid or
    Health Choice
  • Includes the following provisions
  • Provider Screening which assigns a risk level to
    providers of limited, moderate or high.

Session Law 2011-399
  • Criminal History Record Checks
  • Payment Suspension and Audits (includes voluntary
  • Prepayment Claims Review
  • Threshold recovery amount (150)
  • Provider Enrollment Criteria
  • Provider Cooperation with Investigations Audits
  • Appeals by Medicaid Providers Applicants

Provider Self-Audit Process
  • Process has been in place since 1999 now being
    expanded to incorporate new activities based on
    Session Law 2011-399.
  • In accordance with NC Session Law 2011-399, low
    or moderate risk providers do have the
    opportunity to conduct self-audits as a method of
    contesting the outcome of a PI audit.

Suspension of Payments
  • In accordance with 42 CFR 455.23, payments may be
    suspended if/when a credible allegation of fraud
    is received and investigation pending.
  • Note DMA is the only authorized entity that can
    suspend payment based on a credible allegation of

DMA Contract Requirements Fraud and Abuse
  • Policy and Procedure Driven
  • Procedure to verify services paid by Medicaid
    were actually delivered
  • PP that clearly articulate SHCs commitment to
    comply with all standards
  • Designation of a compliance officer and committee
    accountable to management
  • Effective Training Education
  • Effective lines of communication between the
    compliance officer and staff

DMA Contract Requirements Fraud and Abuse Contd
  • Enforcement of Standards through well-publicized
    disciplinary guidelines
  • Internal monitoring and auditing
  • Prompt response to detected offenses including
    corrective action initiatives
  • Development and maintenance of Compliance Plan
  • Notification to DMA-PI of all credible
    allegations of fraud or abuse.

Sandhills Center PI Efforts
  • Implementation of Regulatory Compliance Plan
  • Designation of a Regulatory Compliance Officer
  • Establishment of a Regulatory Compliance
  • Education and Training
  • Monitoring Activities internal and external

Sandhills Center PI Efforts
  • Development of Program Integrity Team whose
    responsibilities include but are not limited to
  • Data mining and analysis
  • Determining confidence levels for data
  • Conducting investigations for referrals of F/W/A
  • Referral of cases of suspected F/W/A to
    appropriate oversight agencies

Identification of Potential F/W/A
  • Sources include
  • Data Analysis Reports
  • Post payment Claims Reviews
  • Requests from SHC Internal Departments
  • Calls or Complaints

Activities to Detect PreventFraud and Abuse
  • Examples include
  • Review of OIG database and National Practitioner
    Data Bank (NPDB) for exclusions
  • Falsification of Provider Qualifications
  • Authorization requests for non-covered services
  • Extending the length of treatment or delays in
  • Duplicate entry of claims for the same member by
    the same provider
  • Pattern of large volume of complaints against a

  • 42 CFR 438 (Managed Care)
  • 42 CFR 434 (Contracts)
  • 42 CFR 455 456 (PI Utilization Control)
  • False Claims Act (31 USC 3729-3733)
  • Anti-Kickback Statute (42 USC 1320a-7b(b)
  • Self-Referral Law (42 USC 1395nn)
  • Exclusion Statute (42 USC 1320a-7)
  • Civil Monetary Penalties Law (42 USC 1320a-7a)