Personal service care fraud; a growing problem for Medicaid

Medicaid personal care service (PCS) fraud cases made up a “substantial and growing” portion of cases investigated by the Medicaid Fraud Control Units (MCFUs) and greater oversight is recommended by the HHS Office of the Inspector General (OIG). In a report covering the PCS work of MFCUs over fiscal years 2012-2015, the OIG found that these cases comprised over 12 percent of the total investigations and accounted for 34 percent of the convictions (OIG Report, OEI-12-16-00500, December 6, 2017).

Background

Personal care services are those services that support consist daily living activities, including bathing and dressing, meal preparation, and transportation. PCS providers assist the elderly, people with disabilities, and individuals with chronic or temporary health conditions, allowing these persons to remain living in their homes and communities. PCS are typically delivered through either an agency-directed PCS or a self-directed PCS, through which beneficiaries hire and supervise their own provider. PCS are offered either as an optional benefit through a Medicaid State plan or through demonstration projects and waiver programs. States are required to develop their requirement and qualification standards for PCS providers, resulting in widely varying requirements across the country.

Growing percentage

The OIG found that during the three-year review period, PCS fraud cases made up a substantial and increasing number of MFCU cases and outcomes. In FY 2015, such cases made up 12 percent of total investigations and over the review period, they made up 38 percent of indictments, and 34 percent of convictions. Furthermore, during the review period, indictments increased 56 percent and convictions increased 33 percent. Payments to PCS providers represented $13 billion out of $524 billion total Medicaid expenditures during FY 2015.

Recommendations and challenges

MCFUs have recommended that State Medicaid either enroll PCS attendants as Medicaid providers, or include PCS attendants in a provider registry. This would allow for the assignment of unique provider identification number to PCS attendants to include on claims for reimbursement. Some form of enrollment or registration is needed, as the inability to identify individual PCS attendants restricts the ability to identify fraudulent providers. MCFUs have suggested that enrolling PCS attendants in Medicaid would better inform them about Medicaid procedures and requirements.

MCFUs have also recommended the use of background checks for attendants. They found that the current, minimal, background check requirements could put vulnerable beneficiaries at risk. For example, a PCS attendant in Arizona pleaded guilty to theft and financial exploitation of a vulnerable adult, after having stolen checkbooks, cash, credit cards, and personal items belonging to the beneficiaries. The PCS agency checked for felony arrests and found none; the attendant had, however, numerous misdemeanor convictions and had previously lost her nursing assistant license.

The MCFUs have also recommended using additional documentation requirements, such as requiring require PCS attendants to provide detailed or standardized timesheets and to show the start and stop times for the services. The currently minimal PCS documentation means that PCS claims data may not contain the identity of the PCS attendant, the number of hours worked, or the time of day during which the services were provided.

Lastly, the MCFUs recommended that State Medicaid agencies implement a variety of controls regarding oversight of PCS providers and their services. These controls include more frequent in-home supervisory visits, training for PCS attendants and cross-reference attendant and beneficiary location. For a variety of reasons, beneficiaries may be reluctant to report abuses and more frequent in-home visits could curtail fraud.

Funding issues

The units reported that their efforts to protect beneficiaries are hamstrung by their ineligibility to receive Federal funding to investigate and prosecute complaints in nonfacility settings. Such complaints are often referred to other agencies. Those agencies often do not receive the same level of training on patient abuse and neglect that MCFU staff receives and may have severely strained resources.

Conclusions

The report found that the volume and increase of MFCU investigations and prosecutions indicates that PCS remain vulnerable to fraud. The report noted that the recommendations are similar to those made in previous reports and states that it is crucial that federal funding authority be expanded to allow MFCUs to investigate and prosecute cases of patient abuse and neglect in nonfacility settings.

AGs request Medicaid policy change to fight in-home elderly abuse, neglect

The Centers for Disease Control and Prevention’s (CDC) estimate that one in 10 people aged 65 and over who live at home will become the victim of abuse has drawn the attention of the National Association of Attorneys General (NAAG). Millions of people in this age group are enrolled in Medicaid and the NAAG believes that a change in policy allowing federal funds to investigate more abuse and neglect cases—even those that occur in the home—will help.

Medicaid Fraud Control Units (MFCUs) are charged with investigating and prosecuting state Medicaid provider fraud as well as resident abuse and neglect complaints at Medicaid-funded health care facilities, and can choose to look into complaints at board and care facilities. The MFCUs usually operate within the state attorney general’s office. Because there are strict limitation on the use of MFCU funds to investigate fraud and abuse, the NAAG is now asking Secretary of HHS, Tom Price, to replace or eliminate the “outdated” policies. Instead NAAG provided two recommendations to the Secretary: (1) allow MFCU funds to investigate and prosecute abuse and neglect of Medicaid beneficiaries in non-institutionalized settings; or (2) allow use of MFCU funds to freely screen or review any and all complaints or reports of whatever type, in whatever setting.

The May 10, 1017, letter to Price was signed by attorneys general of 37 states and the District of Columbia. Montana Attorney General Tim Fox noted “abuse and neglect in the home takes many forms, including physical abuse, sexual abuse, and drug diversion. Abuse and neglect is perpetrated by family, friends, and caregivers alike. The requested change in policy would allow our MFCU to investigate reports…regardless of where they reside, whether it’s a home or in a healthcare facility.” David Y. Chin, Attorney General of Hawaii, cited “[the Hawaii MFCU] receives thousands of complaints relating to fraud and abuse and neglect every year…We hope that the federal government will hear our concerns and support our efforts to protect Hawaii’s most vulnerable residents.”

Kusserow on Compliance: OIG reports Medicaid Fraud Control Units results for 2016

The HHS Office of Inspector General (OIG) is the designated Federal agency that oversees state Medicaid Fraud Control Units (MFCUs). It issued a report on their statistical results for 2016. MFCUs are charged with investigating and prosecuting patient abuse or neglect in nursing homes and hospitals, as well as in assisted living facilities. Seventy-five percent of MFCU funding comes from the federal government. The OIG administers the grant to each of the units, sets performance standards, reviews each state’s program, provides technical assistance identify best practices, and collects and analyzes statistics. There are MFCUs in 49 states and the District of Columbia with funding of $258,698,147. With a staffing of 1,965 investigators, auditors, and attorneys, they investigated 15,505 fraud cases and another 3,221 abuse and neglect cases. This resulted in 1,564 criminal convictions and 998 civil settlements. They also achieved a total $1,876,532,842 in monetary recoveries with $368,498,733 from criminal actions, $1,225,709,487 in civil settlements, and $282,324,622 from other actions.  MFCUs most often work their own cases without assistance from other agencies. The OIG works a lot of cases with the MFCUs and in 2016, these cases resulted in 312 indictments, 348 criminal actions, and 222 civil actions. These Medicaid cases–some of which also involved Medicare–resulted in almost $3 billion dollars in expected recoveries.

The results of individual units can be found in the OIG report, along with a more detailed statistical breakdown of data. For comparison in results, the OIG issued a detailed report for 2015, noting that the MFCUs achieved 1,553 convictions, 731 civil settlements and judgments, and $744 million in criminal and civil recoveries. In this report, the OIG provided a detailed breakdown of the types of cases and trending data.

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 © 2017 Strategic Management Services, LLC. Published with permission.