Study: Medicaid gave out $11.1M in ‘potentially inappropriate payments’

Matt Bittle
Posted 10/12/15


DOVER — An outside contractor tasked with identifying possible waste and fraud in Delaware’s Medicaid has singled out $11.1 million in “potentially inappropriate payments” made …

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Study: Medicaid gave out $11.1M in ‘potentially inappropriate payments’



DOVER — An outside contractor tasked with identifying possible waste and fraud in Delaware’s Medicaid has singled out $11.1 million in “potentially inappropriate payments” made over a period of about three-and-a-half years.

Those payments could come from doctor shopping, in-patient services that should have been billed as outpatient, and care that is not medically necessary.

The General Assembly directed the Department of Health and Social Services (DHSS) in 2014 to work to save money in health care after the legislature’s Joint Finance Committee members stated their belief that $12 million could be saved annually.

After a delay, which irked lawmakers, DHSS commissioned Health Integrity in March to examine potential patient and provider misuse of services in Medicaid.

About 230,000 Delawareans are enrolled in Medicaid.

The report aimed to examine Medicaid payments to find areas of abuse or waste and to recover money where possible. A preliminary May study found about $4.1 million in payments deemed worth examining further. Recent findings show more potential savings.

Health Integrity analyzed April 2012 to September 2015, a period that saw $226 million in Medicaid claims.

“The identified overpayments are a combination of funds that could be recovered immediately without the need for medical review and cases where additional investigation/medical review of the potential improper payment is needed,” the report states.

Most of the money would have to be reviewed. There is no guarantee it could be recovered by the state.

The payments are divided into seven areas:

About $3.2 million comes from dental services, which could include excessive crowns or billing for work on a tooth that has previously been removed. About $2.6 million was identified for inpatient hospital claims, which should have been billed as outpatient. Another $2.6 million was identified for patients receiving hospice care for which they were not eligible.

A total of $1.2 million was found among individuals billing the government for services greater than what they received. The report notes $930,000 of improper billing for drugs, including individuals visiting multiple providers to receive more prescriptions and pharmacies billing for improper refills. About $65,000 of the pharmacy findings could be recovered immediately, Health Integrity estimated.

Also, $500,000, of which about $6,000 could be gained without further investigation, relates to billing for patients potentially not eligible for Medicaid services.

Health Integrity found about $17,000 of potential fraud or waste in improper durable medical equipment, such as billing for one part of equipment but not for other necessary pieces of the same item.

The company also issued recommendations. It noted it could use algorithms to closely examine stolen identity cases, unnecessary equipment charges and drugs that are prone to abuse.

“The pilot has demonstrated the complexity of the Medicaid program and challenges associated with the implementation of fraud prevention strategies,” wrote Stephen Groff, director of the state’s Division of Medicaid and Medical Assistance, in a letter to lawmakers and budget officials.

“We were encouraged to confirm that our system already contains many edits to protect against overpayments. We also learned that development of more sophisticated algorithms and technology supports provides the opportunity to put in place even stronger protections.”

Legislators allocated $500,000 for the program in the previous fiscal year with half of that to be withheld until “an adequate return on investment,” defined as at least $250,000, was found.

It’s possible the state fails to recoup any money. Some findings by Health Integrity were found to be inaccurate upon further examination, and money that is paid back may go to the federal government.

The report will be discussed by the Legislature’s Joint Finance Committee next month.

The project will continue through December.

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