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.

Behavioral health fraud perpetrators plead guilty to $1M Medicaid scheme

Two men, who created and managed a company that provided mental health care to Medicaid patients and collected over $1 million in Medicaid payments, pleaded guilty to conspiracy to commit health care fraud. The president of Coastal Bay Behavioral Health, Inc. (Coastal Bay) acknowledged in the plea agreements that the other participant was an “excluded provider,” who was prohibited from billing federal health care programs due to a 2011 conviction for health care fraud. Each man faces a maximum penalty of five years in prison and a fine of up to $250,000.

Although the president was aware that he was employing an excluded provider, he did not disclose this fact to the state Medicaid program. Using an alias, the provider performed a variety of functions, including hiring and firing individuals, seeing patients, and performing other managerial tasks. Coastal Bay received $1.2 million in reimbursements from Medicaid because of the provider’s alleged fraud, according to court papers.

The provider and his family received significant financial benefits due to his involvement in Coastal Bay. Specifically, the provider had access to a Coastal Bay credit card, which he used to make routine purchases at restaurants, furniture stores, gas stations, and other places in North Carolina, even though Coastal Bay had no operations in North Carolina. In addition, the provider and his immediate family received more than $10,000 in direct payment withdrawals from the Coastal Bay business account.

Mental health services provider enters into $4M FCA settlement

A provider of in-home mental health services and two of its leaders agreed to pay a total of $4.5 million to settle allegations that they violated the federal False Claims Act (FCA) and the Minnesota False Claims Act by billing Medicaid for services that violated clinical supervision requirements. Under the agreement, Complementary Support Services (CSS) and related entities will pay $4 million, its president will pay $400,000, and an executive will pay $120,000.

According to Acting U.S. Attorney Gregory G. Brooker and Minnesota Attorney General Lori Swanson, CSS provided in-home mental health services to children and adults through two Medicaid programs that restrict reimbursement to time spent providing face-to-face services with the patient and prohibit reimbursement for a therapist’s time completing paperwork. Both programs also require a licensed therapist such as a social worker or psychologist to clinically supervise patient care to ensure that the services are appropriate and medically necessary.

Between 2007 and 2016, however, CSS failed to submit claims that reflected signature by licensed professionals serving as clinical supervisors. Instead, CSS’ president “batch signed” progress notes that formed the basis for billing Medicaid. In addition, CSS employees routinely added an extra billable unit for paperwork time for each client visit.

Local news reported that this case reflected a longstanding gap in Minnesota’s oversight of mental health services because CSS, like 200 other agencies, was unlicensed and not subject to routine regulatory oversight. In the wake of these allegations, the state began reviewing its oversight of mental health agencies.

As a part of the settlement, CSS is permanently excluded from participating in federal and state health care programs. The president agreed to an exclusion of at least eight years, and the executive agreed to an exclusion of at least five years.

Kusserow on Compliance: Personal care services (PCS) attendants need stricter screening

 

The HHS OIG issued an “Investigative Advisory on Medicaid Fraud and Patient Harm Involving Personal Care Services” (PCS), a nonmedical assistance to the elderly, people with disabilities, and individuals with chronic or temporary conditions so that they can remain in their homes and communities. It is typically provided by an attendant who works for personal care agencies enrolled in the Medicaid program. PCS is an optional Medicaid benefit that States may choose to provide under State plan options and/or through Medicaid waiver and demonstration authorities approved by CMS and it is their responsibility to develop qualifications or requirements for attendants to ensure quality of care. The OIG has issued a number of reports concerning high levels of improper payments, questionable care quality, and high amounts of fraud summarized in a Portfolio of 2012. The current report provides additional data concerning the problem and included results of a survey of State Medicaid Fraud Control Units (MFCUs) about fraud trends in the PCS program. Since that report, the OIG has opened more than 200 investigations involving fraud and patient harm and neglect in the PCS program across the country.

The OIG cited a number of examples of different schemes and the negative consequences, including billing for PCS either not necessary or not actually provided; recruiting Medicaid beneficiaries to participate in fraud schemes; and noting instances where patients were harmed, as result of abuse or neglect, resulting in some cases in hospitalizations and even death. The OIG reported discussing potential administrative actions with the CMS, including:

  • Issuing informational bulletins to states on how to improve internal controls for PCS.
  • Establishing minimum Federal qualifications and screening standards for PCS workers, including background checks.
  • Requiring States to enroll or register all PCS attendants and assign them unique numbers.
  • Require that PCS claims identify the dates of service and the PCS attendant who provided the service.
  • Considering whether additional controls are needed to ensure that PCS are allowed under program rules and are provided.