Kusserow on Compliance: CMS increases audits to address Medicaid fraud and abuse

In efforts to prevent Medicaid fraud and reduce improper payments, CMS is in the process of implementing eight “new or enhanced” program integrity initiatives and strategies to address reported billions in improper Medicaid payments. These initiatives include target auditing of selected state programs and known vulnerabilities. The stated aim is to promote transparency and accountability. The CMS announcement noted that Medicaid spending has risen more than 26 percent in the three years leading up to 2017, from $456 to $576 billion. A significant part of the increase was as result of states expanding their Medicaid programs under the Patient Protection and Affordable Care Act (ACA). Most of this increase was covered by the federal government, with its share rising 38 percent, from $263 billion to $363 billion, over the same three-year period. CMS efforts include evaluating the impact of this expansion on program integrity. The announced new initiatives followed a Senate hearing that lambasted CMS, reporting that Medicaid pays out $37 billion a year of improper payments, an increase of 157 percent since 2013.  The new initiatives will be designed to address previously identified activities that harmed Medicaid’s program integrity, and address problems identified by the GAO and OIG and include:

  1. Targeted audits of certain state MCOs. CMS will review financial reports from MCOs in targeted states to ensure they match actual claims experience.
  2. New audits of beneficiary eligibility. States that had OIG reviews of Medicaid beneficiary eligibility will have follow-up determinations reviewed by CMS.
  3. Claims and provider data optimization. CMS will validate the quality and completeness of state-provided data in the Transformed Medicaid Statistical Information System (TMSIS) using data analytics and other techniques to improve data quality and to flag potential problems that require further investigation.
  4. Data analytics pilots. CMS will use analytics and other IT tools on state-provided data to optimize state data to identify areas that need additional investigation.
  5. Provider screening on an opt-in basis. CMS will pilot a plan to screen Medicaid providers on behalf of states, in the belief that centralizing this process will improve efficiency and coordination across Medicare and Medicaid. This, in turn, should reduce state and provider burden, and address one of the biggest sources of error as measured by the Payment Error Rate Measurement (PERM) program.
  6. State-federal data sharing and collaboration. CMS is giving states access to the SSA’s master file of death records to help with managing provider enrollment.
  7. Publicly report state performance. The Medicaid scorecard will indicate how well states perform on certain measures pertaining to their Medicaid programs. This scorecard will include the state’s “integrity performance measures,” such as PERM.
  8. Provider education to reduce improper payments. CMS will bolster education efforts for Medicaid providers to reduce billing errors, including targeting comparative billing reports and provider-facing tools currently in development.

 

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

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Copyright © 2018 Strategic Management Services, LLC. Published with permission.

CBO, JCT share methods for analyzing legislative proposals impacting health insurance coverage

The Congressional Budget Office (CBO) and the Joint Committee on Taxation (JCT) revealed in a recent report how they jointly analyze proposed legislation that would impact health insurance coverage for individuals younger than age 65, detailing how they develop analytic strategies, model a proposal’s effect, and finalize their analysis (CBO Report, February 2018).

Analytic strategy development

First, the CBO and JCT put together an analytic strategy. The agencies formally develop their strategy once the proposed legislation’s specifications become available, an official request for analysis has been made, and the CBO and JCT arrange the time to commence the analysis. However, the agencies also often work informally with Congressional staff during development of the proposal. The agencies begin by reviewing the policy specifications. The CBO and JCT consider how the proposed legislation would impact existing law and how the proposed legislation is different from earlier proposal drafts. The agencies work to verify that the Congressional staff’s intent is reflected in the language and then estimate the legislative effect by, namely, identifying how the proposal could affect health insurance coverage and the federal budget.

The CBO and JCT focus on the policy changes most likely to impact health insurance coverage or cost, ranging from the straight-forward to the more complex. Another key aspect the agencies consider is timing and what additional “administrative infrastructure” is necessary to bring about the changes of the proposed legislation—and how long it would take to do so. The timing element includes estimates of how other stakeholders (state governments, insurers, employers, etc.) would respond and how long it would take for them to implement the proposed changes. To help with their estimates, the agencies rely on past cases of legislative reform programs. Further, the agencies seek input from outside experts and existing evidence while maintaining the required confidentiality of a proposal.

Proposal effect modeling

Second, the CBO and JCT undertake modelling the impact of the proposed legislation. Primarily, the agencies rely on CBO’s health insurance simulation model (HISIM), Medicaid enrollment and cost models, and JCT’s individual tax model. These models use data on health insurance coverage information for everyone younger than 65, Medicaid enrollment and expenditures, and detailed tax return information. The agencies also draw estimates based on information HISIM cannot project, namely, the behavior of states, employers, and insurers. These initial projections are incorporated as inputs into HISIM (state, employer, and individual enrollee behavior) or assessed outside HISIM (insurer behavior). CBO and JCT also use HISIM to estimate stakeholder responses to new coverage options. Medicaid enrollment and cost projections use HISIM estimates in addition to a more detailed Medicaid model and other methods. JCT usually provides estimates of proposed tax liability changes using its individual tax model.

Review

Finally, both the CBO and JCT engage in rigorous review of their respective analysis results in order to ensure objectivity and proper analysis. Specifically, they examine results of one or more years out of the 10-year projection period to ensure that the analysis is being computed as intended and compare results against previous analyses. The agencies also inspect for programming errors or unexplained results. The CBO and JCT consider changes to the results if there were different critical inputs. The agencies prepare a formal written estimate and explanation thereof and, before releasing it to Congress and the public, agency staff carefully review the report.

Despite uncertainty about ACA most states moving forward with Medicaid expansion

Although the future of Medicaid funding is unclear with the ongoing efforts to repeal and replace the Affordable Care Act (ACA) (P.L. 111-148), many states were still working to expand Medicaid services and benefits, according to a joint Kaiser Family Foundation (KFF) and Health Management Associates (HMA) report. In an annual survey collecting data about Medicaid policies in place or implemented in fiscal year 2017 and policy changes that will be implemented or are being discussed for fiscal year 2018 in each state and the District of Columbia, KFF and HMA noted that some of the biggest changes are occurring in eligibility policies, managed care reforms, and the expansion of benefits.

Eligibility and Premiums

In 2017, seven states made changes to expand Medicaid eligibility and in 2018 another seven are planning to implement eligibility expansions. These changes include eliminating the 5-year bar on Medicaid eligibility for lawfully-residing immigrant children or providing coverage for a new eligibility group of individuals who are chronically homeless, justice-involved, or in need of substance abuse or mental health treatment with an income below 5 percent of the federal poverty level. A few states are looking to make changes to restrict Medicaid eligibility by imposing work requirements and asset tests.

In recent years, many states have made changes to the way Medicaid coverage is handled when beneficiaries are in the criminal justice system. Some states have opted to suspend coverage when someone is incarcerated rather than terminate coverage, as they have done previously, so it is easier to reinstate coverage when the beneficiary is released. Additionally, some states have developed initiatives to work with and train criminal justice employees to assist with Medicaid applications after a person is released.

Managed Care

Twenty-nine of 39 states with risk-based managed care organizations (MCOs) reported that 75 percent or more of their Medicaid beneficiaries were in enrolled in MCOs as of July 1, 2017. Most states carve-out certain services, such as behavioral health services, from their MCO contracts. In 2017 at least six states took steps to carve in behavioral health services into their MCO contracts and ten states reported plans to work toward carving in behavior health services in 2018. Twenty-six of the 39 MCO states reported that they would use the funds available for inpatient psychiatric treatment or substance use treatment under the 2016 Medicaid Managed Care Final Rule; however, many states commented that the 15-day limit was too restrictive for the type of treatment that it was meant to cover. Sixteen states in 2017 and 17 states plan in 2018 to include specific initiatives to encourage MCOs that cover LTSS to expand access to home and immunity-based services (HCBS).

Benefits

Twenty-six states reported new or enhanced benefits in 2017 and 17 states plan to add or enhance benefits in 2018. These added benefits include mental health and substance use disorder services, alternative plain therapies, family planning and cancer screenings. Nineteen states reported new or expanded initiatives to expand dental access or improve oral health outcomes in 2017 or 2018. Additionally, 19 states reported initiatives to expand the use of telehealth in 2018 or 2019. For 2018, 22 states reported plants to adopt or expand initiatives such as patient-centered medical homes or accountable care organizations in an effort to encourage integrated care. Fourteen states in 2017 and 13 states plan in 2018 to report expansions and additions to the HCBS programs, including personal supports, supported employment, home delivered and medically tailored meals among others.

Although most states are continuing to look ahead to expand Medicaid benefits and eligibility, almost all states are still concerned about the negative fiscal consequences that they would face in the proposed limits on federal Medicaid spending. Medicaid directors from the 32 ACA Medicaid expansion states reported the states would not be able to continue providing coverage for expansion population, or the coverage would be at a substantial risk, if the ACA federal match was terminated.

Webinar: Delay, Deregulate, Derail — Health Care Roiled by Actions of Trump and Congress

Since January, both President Trump and Republican leaders in Congress have talked about a three-step process for repealing and replacing the Patient Protection and Affordable Care Act (ACA). While the first six months of the Trump administration has seen mixed results, its efforts to reign in or hold back regulations, combined with its delay in filling lower-level agency roles, has impacted regulatory review and issuance of new regulations. So, despite Congress’ inability to pass legislation to change parts of the ACA, there is still plenty for providers to be concerned about.

Join Associate Managing Editor Kathryn Beard, JD, on Wednesday, August 2, for this half-hour live webinar covering attempts by the Trump Administration and Congress to delay, deregulate, and derail significant parts of federal health policy. She will discuss the two “repeal and replace” bills, FDARA, and significant executive and regulatory actions taken by the Trump administration which directly impact ACA provisions.

Registration Link: