Utah Medicaid Audits: Office of the Utah Legislative Auditor General NLPES Fall Conference 2011
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1 Utah Medicaid Audits: Office of the Utah Legislative Auditor General NLPES Fall Conference 2011
2 Office of the Utah Legislative Auditor General Medicaid Audits Medicaid Audits: Fraud, Waste, and Abuse Controls in Utah s Medicaid Program Utah Medicaid Managed Care Utah Medicaid Provider Cost Control Medicaid s Implementation of Audit Recommendations Slide 2
3 A Performance Audit of Fraud, Waste, and Abuse Controls in Utah s Medicaid Program Utah Legislative Auditor General August 2009
4 Fraud, Waste, and Abuse Controls Audit Reviewed Controls to: Prevent Detect Collect Fraud, Waste, and Abuse Small Percent Of Providers Involved Estimated Conservatively at 3 Percent Of Claims At 3 percent, Utah Could Recover An Additional $20.2 Million Slide 4
5 Cost Savings Model for BPI Ch. II Improve Controls Over Utilization Ch. III Improve Controls Over Provider Enrollment Ch. IV Improve Effectiveness and Efficiency of Cost Recovery Effort Ch. V Improve Oversight and Ensure All Medicaid Funds Are Reviewed Cost Avoidance Cost Recovery See Chapter I, Page 2 Slide 5
6 Ch. II Improve Controls Over Utilization Ch. III Improve Controls Over Provider Enrollment Ch. IV Improve Effectiveness and Efficiency of Cost Recovery Effort Ch. V Improve Oversight and Ensure All Medicaid Funds Are Reviewed Cost Avoidance Cost Recovery Slide 6
7 Prior Authorization Is Not Adequately Controlling Utilization Unclear Policies Can Lead to Unnecessary Medical Costs Circumcisions Mid-face reconstruction Graft of Ear or Nose Rhinoplasty Breast Augmentation See Chapter II, Figure 2.3, Page 18 Slide 7
8 Insufficient Management Control Has Led to Unnecessary Medical Costs Nurses Approval Rate For Same Procedures Nurse Approval Percent Average Monthly Requests Nurse O 92.2% 179 Nurse F 91.4% 174 Nurse G 48.4% 153 See Chapter II, Figure 2.7 Page 24 Slide 8
9 Prior Authorization Cost Savings For Physician Costs Approval Rate Estimated Cost Savings Difference From Actual CY 2008 Cost Savings 75% $18,300,000 $9,500,000 79% $15,400,000 $6,600,000 83% $12,500,000 $3,700,000 88% $8,800, % $5,100,000 ($3,700,000) 97% $2,200,000 ($6,600,000) 100% $0 ($8,800,000) See Chapter II, Figure 2.8, Page 27 Slide 9
10 Ch. II Improve Controls Over Utilization Ch. III Improve Controls Over Provider Enrollment Ch. IV Improve Effectiveness and Efficiency of Cost Recovery Effort Ch. V Improve Oversight and Ensure All Medicaid Funds Are Reviewed Cost Avoidance Cost Recovery Slide 10
11 Controls Over Enrolling New Providers Can Be Strengthened Reviewing Providers That Exhibit Signs of Fraud Leads To Cost Avoidance Medicaid Does Not Deny Any Providers Other States/Insurance Companies Have Stricter Acceptance Policies See Chapter III, Pages 30 to 34 Slide 11
12 Monitoring of Current Providers Can Improve 127 Current Medicaid Providers Have DOPL Disciplines: Sexual Conduct With Patient While Under Nitrous-Oxide Filing False Insurance Claims Communications Fraud Unwarranted Medical Procedures See Chapter IV, Pages 34 to 38 Slide 12
13 Ch. II Improve Controls Over Utilization Ch. III Improve Controls Over Provider Enrollment Ch. IV Improve Effectiveness and Efficiency of Cost Recovery Effort Ch. V Improve Oversight and Ensure All Medicaid Funds Are Reviewed Cost Avoidance Cost Recovery Slide 13
14 Inefficiency and Ineffectiveness is Hampering Cost Recovery Efforts Increased Recovery From 1.72 Percent See Chapter IV, Figure 4.1, Page 44 Increased Savings Federal and State Increased Savings State Only 2.00% $4.4 Million $1.3 Million 2.50% $12.3 Million $3.5 Million 2.75% $16.2 Million $4.7 Million 3.00% $20.2 Million $5.8 Million 3.50% $28.1 Million $8 Million 4.00% $36 Million $10.3 Million 5.00% $51.7 Million $14.9 Million Slide 14
15 Problems Hindering Fraud and Abuse Recoveries Ineffective Analytical Tool 62% of Provider Types Receive No Electronic Review Unreliable Data Inaccurate Recovery Data See Chapter IV, Pages 44 to 52 Slide 15
16 Inefficient Use of Staff Time Rates of Return for Two Primary BPI Activities Follow-Up Reviews Inpatient Hospital Salary/Benefits $63,730 $112,367 Recoveries $16,346 $588,632 Recovery Per $1.00 Expenditure $.26 $5.24 Net or Benefit Cost ($47,384) $476,265 See Chapter IV, Figure 4.7, Page 53 Slide 16
17 Ch. II Improve Controls Over Utilization Ch. III Improve Controls Over Provider Enrollment Ch. IV Improve Effectiveness and Efficiency of Cost Recovery Effort Ch. V Improve Oversight and Ensure All Medicaid Funds Are Reviewed Cost Avoidance Cost Recovery Slide 17
18 95% of Medicaid Funds Not Being Reviewed by BPI 78% of Hospital Claims Not Being Reviewed Over 90% of Non-Inpatient Claims Not Being Reviewed No Oversight of Other Contracted Medicaid Services See Chapter V, Pages 57 to 69 Slide 18
19 Greater Oversight Needed Bureau of Program Integrity BPI DOH Internal Auditors Medicaid Auditors See Chapter VI, Pages 71 to 81 Slide 19
20 Utah Medicaid Managed Care Utah Legislative Auditor General August 2009
21 Managed Care Background 2 Managed Care Plans Molina (23.3%) Healthy U (15.2%) 1 State Run Plan Select Access (29.5%) See Chapter I, pgs 4 & 5 and Chapter II, pg 11 Slide 21
22 Few Cost Control Incentives Have Existed Cost-Plus Contracts Rewarded Higher Utilization Leading To Higher Overall Costs Utah Medicaid Inadequate Oversight Result: Excess Costs in Managed Care See Chapter II, pages Slide 22
23 PMPMs of Managed Care Plans Rate Cell Molina Select Access Healthy U Male Children $108 $109 $102 Male Adults $420 $328 $334 Female Children $109 $106 $100 Female Adults $361 $322 $322 Disabled Males $816 $685 $723 Disabled Female $823 $723 $751 Male Babies $206 $202 $190 Female Babies $193 $241 $171 Pregnancy $522 $497 $535 Slide 23
24 Cost Savings Estimate $16 20 Million Optimal $6 12 Million Realizable See Chapter III, pages Slide 24
25 Past ER Payment Error Will Produce Savings Utah Medicaid Overpaid Hospitals $14 Million for non-reimbursable ER Costs The costs are collectable See Chapter VI, 66 to 71 Slide 25
26 Quality of Care Oversight Good, But Can Improve Current Oversight Compliance Driven To Improve Set Better Performance Goals Better Document Corrective Action Standardize Reports See Chapter V, pages 55 to 64 Slide 26
27 Utah Medicaid Provider Cost Control Utah Legislative Auditor General January 2011
28 Background of Audit Department of Health Executive Director s response to the 2009 audit - fraud, waste, and abuse does not occur in Utah like it does in other states. Speaker of the House/Chair of the Audit Subcommittee in response - we will send out our auditors to see if there is fraud, waste, and abuse in your program. Slide 28
29 Medicaid Fraud, Waste, and Abuse Is a Concern in Utah First Upcoding (overcharging) Is a Problem in Utah Medicaid Second Utah s Fraud, Waste, and Abuse Rate Is Comparable to Other States Third Current Cases Show Examples of Fraud, Waste, and Abuse See Chapter II, pages 9 to 23 Slide 29
30 Clinics Frequently Billing Code Clinic Number of Times Code Billed DOH Salt Lake Clinic 718 A Private Health Clinic 539 Provider Provider Provider See Chapter II, page 13 Slide 30
31 Department of Health Owned Clinic Independent Review Found: 99 percent of claims upcoded or overcharged 73 percent upcoded two or more levels DOH management members also upcoded See Chapter II, pages 11 to 17 Slide 31
32 Private Clinic Program Integrity Review Found: 88 percent of claims upcoded or overcharged 56 percent upcoded two or more levels See Chapter II, page 17 Slide 32
33 Medicaid Paying for the Transportation of Unborn Babies Problem Has Existed For At Least 5 Years Problem Has Been Identified 3 Times See Chapter III, pages 26 to 27 Slide 33
34 Utah Medicaid Paying More Than PEHP Drug Percent Utah Medicaid Higher Than PEHP Drug A 64% Drug B 51% Drug C 47% Drug D 40% Drug E 39% Drug F 39% Drug G 35% Drug H 26% Drug I 26% Slide 34
35 Audit Results $20 million budget cut to force efficiencies BPI collections up from $3 to $15 million per year Renegotiated managed Care contract savings of $7 million per year OIG established Slide 35
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