Fiscal Fitness: How States Cope
Georgia's Medicaid agency achieves significant increase in financial recoveries in fraud, waste
The Georgia Department of Community Health's Program Integrity Unit has increased its financial recoveries in fraud, waste, abuse, and overpayment cases from $2 million to $22 million a year by taking a law enforcement approach and using sophisticated data mining techniques.
Program Integrity director Doug Colburn tells State Health Watch one of the keys to the success his unit has achieved since he began directing it in December 2003 is that it reports to the department's general counsel rather than to the state Medicaid director, creating more of a law enforcement mindset.
The unit has 53 staff positions, including data analysts, clinical experts, and experienced investigators. It uses Thomson Medstat decision support tools, methodologies, and consulting to mine a five- to seven-year database of claims from all Medicaid beneficiaries.
Mr. Colburn has said the unit's primary goal is to "identify and respond to fraud and abuse within the system and to assist providers with education and corrective action."
He said the unit uses the latest technology to detect and correct abuse and identify fraud; maintains strong relationships with other state and federal agencies that also identify and prosecute fraud and abuse; keeps communications lines open with professional medical organizations to more easily identify providers who abuse Medicaid; has developed a centralized information system that tracks cases from beginning to end; and strives for cost avoidance with corrective action, education, and prevention.
Thomson Medstat client manager Marci Bennafield tells SHW the decision support system Mr. Colburn's staff uses contains a user-friendly interface that works well in the hands of his trained investigators to identify potential fraud cases for follow-up. "It requires someone who knows what they are looking for," she says. "Georgia has skilled investigators who are strong in what they do."
Ms. Bennafield says the decision support system is used across the Medicaid enterprise for financial reporting and budget development, policy analysis, managed care monitoring, provider profiling, clinical quality assessment, evaluation of disease management programs, and other analytic initiatives. Some 14 states currently are using the Thomson Medstat system in their fraud work.
Thomson Medstat, which has worked with Georgia for about 10 years, also provides 30-40 specific fraud algorithms each year, small programs intended to generate a report or respond to a specific question that Mr. Colburn and his staff want to look into.
"Each dollar lost to theft or abuse is one less available for someone who really needs care," Mr. Colburn says. "By stopping fraud and abuse and concentrating on cost avoidance, we help save tax dollars and ensure that valuable health care services will be available for eligible recipients in the future."
Intentional deception
The unit defines fraud as an intentional deception or misrepresentation made by a person with the knowledge that it could result in some unauthorized benefit for himself or others. It includes any act that constitutes fraud under applicable federal or state law.
Abuse includes provider practices that are inconsistent with sound fiscal, business, or medical practices, which result in unnecessary costs to the Medicaid program, or in reimbursement of services that are not medically necessary or that fail to meet professionally recognized standards for health care. Member practices that result in unnecessary costs to the Medicaid/Georgia program or State Health Benefit Plan also are considered abuse.
Examples of fraud and abuse that the unit investigates include unreported income or insurance, Georgia recipients living out of state, drug-seeking behavior, incarceration, individuals receiving bills or explanations of benefits for services never provided, provider billing irregularities, over- or underuse of health care services and misrepresentation of credentials. Provider fraud could involve doctors, hospitals, nursing homes, home health, durable medical equipment, pharmacies, mental health facilities, laboratories, transportation, and dentists.
The unit has 12 investigators, half of whom are certified peace officers. Mr. Colburn tells SHW that because he had 10 years' experience in law enforcement when he became unit director, his first step was to identify inefficient business practices and start to build a better model.
"We tore the organizational chart apart and started over," he recalls.
Because there was no clear route for cases to follow, Mr. Colburn and his staff defined the needed information flow from complaint to resolution. As part of the law enforcement mentality, he says, each case is assigned a number so it can be tracked through the system. Case numbers are assigned at a central point before cases are handed out to investigators.
While staff with clinical expertise had been used to getting cases as they came in, Mr. Colburn moved them to the second phase of handling a case, sending each one first to an investigator because they can do a better job of interviewing and pursuing leads they receive. It is the investigators who have the initial contact with providers.
Once the investigators have developed a case to the point that it is ready to move forward, one or more staff members with clinical expertise is assigned to work with the investigator. They will continue to work together until the case is resolved.
Mr. Colburn tells SHW the data produced by Medstat is the basis for all the cases developed. He tells providers he will not pursue allegations from disgruntled former provider employees unless a statistical analysis backs up the allegation.
The program had its rough moments as the changes were presented and implemented, Mr. Colburn recalls. "I can't say it's easy to change mindsets," he says, "because it wasn't."
But there have been enough success stories achieved in reacting to complaints that the unit is now moving into a second phase that involves mining data for trends that can be investigated proactively rather than waiting for a specific complaint to be filed.
"We're looking for cases and not waiting for them to come in," he says. "And we've seen some successes." One such new effort is a power wheelchair study that is looking at whether some medical device providers have been delivering wheelchairs but billing for more expensive scooters. The unit intended to send letters to those who have received the devices with a picture of each one and a request that they indicate which device they received. Down the road they also will be looking at medical necessity for scooters and wheelchairs.
"Such an effort requires a small resource investment compared to what we are likely to get out of it," Mr. Colburn explains.
Another new study involves ambulance runs that don't show a corresponding emergency room, inpatient, or outpatient treatment.
"You'd be surprised at how many of these pop up," Mr. Colburn asserts. "We're going to send out recoupment letters based solely on the data. Providers will be able to submit more documentation or ask for an administrative review."
Mr. Colburn and his staff also are starting to run trending reports, such as one looking at dentists who prescribe 30- to 60-day supplies of painkillers.
"Our goal is to get to the point that we are always proactively looking for cases," he says. "We then want to get to the point that prevention outweighs what we do reactively. We want to do more identifying trends so the claims system is working for us. Eventually, it will automatically suspend a claim and notify us when a billing seems suspicious."
While the unit had been something of a joke within the organization, with staff morale very low, Mr. Colburn says it has gone through a Cinderella-like change, in which it has gone from being the butt of many jokes to being taken very seriously and being called in early to provide input and consult on actions being considered.
"Agency executives wanted our buy-in to development of our Medicaid managed care process," he reports. "My staff feels a sense of empowerment and they're having fun at what they do."
Mr. Colburn says providers were shocked at first because they were used to being able to take advantage of the department's open-door policy and desire to be sure providers are willing to take Medicaid patients.
"Providers have come to recognize that we want to build up those who are good and honest and help those who have made a mistake," he says.
A by-product of the effort is an increase in accountability and an increase in self-reporting of problems. Mr. Colburn says he has adopted the federal approach in which providers know it is cheaper and easier for them to approach the unit if they think there is an issue in their claims billing rather than waiting for it to be found and taken to an enforcement action.
He says a next step will be to identify providers who have problems, such as billings that generate high denial rates, and offer them web-based training modules. They will track how the providers do after they have seen the training programs.
Asked for his recommendations to states that want to emulate his success, he offered three:
- Centralize the information flow by identifying business processes and tailoring the flow for an efficient process.
- Remove the program integrity unit from the Medicaid program. "You need a clear separation, while there still is a dovetail," Mr. Colburn says. "There can be conflicts of interest if program integrity reports directly to the Medicaid director.
- Develop an emphasis on data and reporting.
Mr. Colburn is proud of the success his unit has achieved but thinks cases will "explode when we are able to take data and go straight to recouping funds."
[Contact Mr. Colburn at (404) 206-6468.]
The Georgia Department of Community Health's Program Integrity Unit has increased its financial recoveries in fraud, waste, abuse, and overpayment cases from $2 million to $22 million a year ...You have reached your article limit for the month. Subscribe now to access this article plus other member-only content.
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