Utah Medicaid Audits: 2008 - 2010 · Office of the Legislative Auditor General Slide 7 Prior Authorization Is Not Adequately Controlling Utilization Unclear Policies Can Lead to Unnecessary

Utah Medicaid Audits:

2008 - 2010

Office of the Utah Legislative

Auditor General

NLPES Fall Conference

2011

Slide 2

Office of the Utah Legislative Auditor General

Medicaid Audits 2008 - 2010

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

Office of the Legislative Auditor General

A Performance Audit of

Fraud, Waste, and Abuse Controls in

Utah’s Medicaid Program

Utah Legislative Auditor General

August 2009

Slide 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

Office of the Legislative Auditor General

Slide 5

Cost Savings Model for BPI

Office of the Legislative Auditor General Slide 5

FOR MORE INFORMATION

See Chapter I, Page 2

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 6Office of the Legislative Auditor General Slide 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 7Office of the Legislative Auditor General

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 8

Insufficient Management Control Has

Led to Unnecessary Medical Costs



See Chapter II, Figure 2.7 Page 24

Nurse Approval Percent Average Monthly

Requests

Nurse O 92.2% 179

Nurse F 91.4% 174

Nurse G 48.4% 153

Nurses Approval Rate For Same Procedures

Slide 9

Prior Authorization Cost Savings

For Physician Costs



See Chapter II, Figure 2.8, Page 27

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% $8,800,000 0

93% $5,100,000 ($3,700,000)

97% $2,200,000 ($6,600,000)

100% $0 ($8,800,000)


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


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


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



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 14

Inefficiency and Ineffectiveness is Hampering Cost

Recovery Efforts



See Chapter IV, Figure 4.1, Page 44

Increased Recovery

From 1.72 Percent

Increased Savings

Federal and State

Increased Savings

State Only

2.00% $4.4 Million $1.3 Million




3.50% $28.1 Million $8 Million

4.00% $36 Million $10.3 Million



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



See Chapter IV, Figure 4.7, Page 53

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

Rates of Return for Two Primary BPI Activities

Inefficient Use of Staff Time


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


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


Greater Oversight Needed


See Chapter VI, Pages 71 to 81


Bureau of Program Integrity – BPI

DOH Internal Auditors

Medicaid Auditors

Utah Medicaid Managed Care


August 2009


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


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 13-18

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


Cost Savings Estimate

$16—20 Million Optimal

$6—12 Million Realizable


See Chapter III, pages 26-32


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


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

Utah Medicaid Provider Cost Control


January 2011


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 Sub-committee in response - we will send out our auditors to see if there is fraud, waste, and abuse in your program.


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 30

Clinics Frequently Billing 99215 Code


Clinic Number of Times Code Billed

DOH Salt Lake Clinic 718

A Private Health Clinic 539

Provider 3 333

Provider 4 329

Provider 5 274


See Chapter II, page 13


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


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


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 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%


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

Documents

Utah Medicaid Audits: 2008 - 2010 · Office of the Legislative Auditor General Slide 7 Prior Authorization Is Not Adequately Controlling Utilization Unclear Policies Can Lead to Unnecessary