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2020 Estimated Improper Payment Rates for Centers for Medicare & Medicaid Services (CMS) Programs | CMS

The article below has been highlighted and summarized by our research team. It is provided here for member convenience as part of our Curator service.

 
 

 
 

Curator summary

Latest Payment Error Rate report from CMS show Medicaid at 3x Medicare Part C for improper payments.

 
 

Clipped from: https://www.cms.gov/newsroom/fact-sheets/2020-estimated-improper-payment-rates-centers-medicare-medicaid-services-cms-programs

The Payment Integrity Information Act of 2019 requires CMS to periodically review programs it administers, identify programs that may be susceptible to significant improper payments, estimate the amount of improper payments, and report on the improper payment estimates and the Agency’s actions to reduce improper payments in the Department of Health & Human Services (HHS) annual Agency Financial Report (AFR).

The Office of Management and Budget (OMB) has identified Medicare Fee-For-Service (FFS), Medicare Part C, Medicare Part D, Medicaid, and the Children’s Health Insurance Program (CHIP) as at-risk for significant improper payments. CMS utilizes improper payment measurement programs for these programs and continues to address the drivers of improper payment rates through aggressive corrective action plans.

In response to the COVID-19 Public Health Emergency (PHE), CMS exercised its enforcement discretion to adopt a temporary policy to suspend all improper payment-related engagement/communication or data requests to providers and state agencies between March and August. To minimize burden on providers and states, CMS modified some of the improper payment statistical methodologies to be able to timely report rates in the 2020 AFR based on data already collected at the time of the PHE or that providers or states voluntarily submitted. CMS will still meet the statutory national-level precision requirements that the rates are +/- 3 percentage points at a 95% confidence interval.

It is important to note that improper payment rates are not necessarily indicative of, or measures of, fraud. Instead, improper payments are payments that did not meet statutory, regulatory, administrative, or other legally applicable requirements and may be overpayments or underpayments. Additionally, improper payments do not necessarily represent expenses that should not have occurred. For example, current OMB guidance states that when an agency’s review is unable to discern whether a payment was proper as a result of insufficient or missing documentation, this payment should be considered an improper payment. A significant amount of improper payments is due to instances where a lack of documentation or errors in the documentation limits CMS’s ability to verify the payment was paid correctly. However, had the documentation been submitted or properly maintained, then the payments might have been determined to be proper. A smaller proportion of improper payments are payments that should not have been made or should have been made in different amounts and are considered a monetary loss to the government (e.g., medical necessity, incorrect coding, beneficiary ineligible for program or service, and other errors).

 
 

FY 2020 Estimated Improper Payment Rates and Improper Payments (Billions)[1]

 
 

Program

2019 Improper     Payment Rate

2019 Improper  Payments

2020 Improper Payment Rate

2020 Improper Payments

Medicare FFS

7.25%

$28.91

6.27%

$25.74

Medicare Part

C

7.87%

$16.73

6.78%

$16.27

Medicare Part

D

0.75%

$0.61

1.15%

$0.93

Medicaid

14.90%*

$57.36*

21.36%*

$86.49*

CHIP

15.83%*

$2.74*

27.00%*

$4.78*

*Medicaid and CHIP 2020 estimated improper payments are not comparable to years prior to 2019, due to the reintegration of the PERM eligibility component.

  

  

  

  

 
 

Medicare FFS (Part A and Part B)

CMS estimates the Medicare FFS improper payment rate through the Comprehensive Error Rate Testing (CERT) program. Each year, the CERT program reviews a statistically valid stratified random sample of Medicare FFS claims to determine if they were paid properly under Medicare coverage, coding, and payment rules. The reporting period for the Fiscal Year (FY) 2020 Medicare FFS improper payment rate included claims submitted during the 12-month period from July 1, 2018 through June 30, 2019.

The FY 2020 Medicare FFS estimated improper payment rate is 6.27 percent, representing $25.74 billion in improper payments. This compares to the FY 2019 estimated improper payment rate of 7.25 percent, representing $28.91 billion in improper payments. The decrease was driven by reductions in the improper payment rates for home health and skilled nursing facility claims.

Home Health – $5.90 billion decrease in estimated improper payments (2016 to 2020) due to corrective actions such as policy clarification and Targeted Probe and Educate (TPE) for home health agencies.

  • Skilled Nursing Facility – $1.00 billion decrease in estimated improper payments (2019 to 2020) due to a policy change related to the supporting information for physician certification and recertification for skilled nursing facility services and TPE for skilled nursing facility services.

Medicare Part C (Medicare Advantage)

The Part C improper payment estimate measures improper payments resulting from errors in beneficiary risk scores. The primary component of most beneficiary risk scores is based on clinical diagnoses submitted by plans for risk-adjusted payment. If medical records do not support the diagnoses submitted to CMS, the risk scores may be inaccurate and result in payment errors. The Part C estimate is based on medical record reviews conducted annually, where CMS identifies unsupported diagnoses and calculates corrected risk scores. The FY 2020 Part C improper payment data is representative of enrollee data generated from the Calendar Year 2018 payment year.

For FY 2020, the Part C improper payment estimate is 6.78 percent, representing $16.27 billion in improper payments. This represents a decrease from the FY 2019 rate of 7.87 percent, representing $16.73 billion in improper payments, and was driven primarily by Medicare Advantage organizations submitting a greater number of medical records that validated the diagnoses for which they were paid.

Medicare Part D (Prescription Drug Benefit)

The Medicare Part D improper payment estimate measures the payment error related to inaccurately submitted prescription drug event (PDE) data, where the majority of errors for the program exists. CMS measures the inconsistencies between the information reported on PDEs and the supporting documentation submitted by Part D sponsors including prescription record hardcopies (or medication orders, as appropriate), and detailed claims information. The FY 20202020 Part D improper payment data is representative of PDE data generated from the Calendar Year 2018 payment year.

For FY 2020, the Part D improper payment estimate is 1.15 percent, or $0.93 billion in improper payments. This represents an increase from the FY 2019 estimate of 0.75 percent, or $0.61 billion in improper payments.

Medicaid and CHIP

CMS estimates Medicaid and CHIP improper payments through the Payment Error Rate Measurement (PERM) program. The improper payment rates are based on reviews of the FFS, managed care, and eligibility components of Medicaid and CHIP in the year under review. The PERM program uses a 17-state rotational approach to measure the 50 states and the District of Columbia over a three-year period. By this approach, CMS measures each state once every three years and national improper payment rates include findings from the most recent three-year cycle measurements. Each time a cycle of states is measured, CMS utilizes the new findings and removes the respective cycle’s previous findings. The review period for the FY 2020 Medicaid and CHIP improper payment rate included claims submitted from July 1, 2018 through June 30, 2019.

The FY 2020 national Medicaid improper payment rate estimate is 21.36 percent, representing $86.49 billion in improper payments. The FY 2020 national CHIP improper payment rate estimate is 27.00 percent, representing $4.78 billion in improper payments. Factors that led to  these improper payment rates include:

  • One area driving the FY 2020 Medicaid and CHIP improper payment estimate is the continued reintegration of the PERM eligibility component, which was revamped to incorporate the Affordable Care Act requirements in the PERM eligibility reviews.  CMS will complete the review of the remaining 17 states and the District of Columbia under the new eligibility requirements over the next year and establish a baseline in FY 2021 once all states are measured under the new requirements.
  • Based on the measurement of the first two cycles of states, the major drivers of the increased Medicaid and CHIP eligibility improper payments are a result of the following: 
  • Eligibility errors are mostly due to insufficient documentation to affirmatively verify eligibility determinations or non-compliance with eligibility redetermination requirements. The majority of the insufficient documentation errors represent both situations where:
  • The required verification of eligibility data, such as income, was not done at all and
  • There is indication the eligibility verification was initiated but there was no documentation to validate the verification process was completed, and non- compliance with eligibility redetermination requirements. 
  • The CHIP improper payment rate was also driven by claims where the beneficiary was incorrectly determined to be eligible for CHIP, but upon review was determined eligible for Medicaid, mostly related to beneficiary income calculations, household composition, and third party liability coverage.
  • Non-compliance with requirements for provider revalidation of enrollment and rescreening.
  • Continued non-compliance with provider enrollment, screening, and National Provider Identifier requirements.

Supplemental information related to the FY 2020 Medicaid and CHIP improper payment results will be published on CMS’s website – www.cms.gov/PERM – in early 2021.

Exchange Improper Payment Measurement

While a FY 2016 risk assessment concluded that the Advance Payments of the Premium Tax Credit (APTC) program is susceptible to significant improper payments, the program is not yet reporting improper payment estimates for FY 2020.  CMS is committed to implementing an improper payment measurement program as required by PIIA.  As with similar CMS programs, developing an effective and efficient improper payment measurement program requires multiple, time-intensive steps including contractor procurement; developing measurement policies, procedures, and tools; and extensive pilot testing to ensure an accurate improper payment estimate.  CMS will continue to monitor and assess the program for changes and adapt accordingly.  In FYs 2017 through 2020, CMS conducted development and piloting activities for the APTC improper payment measurement program and will continue these activities in FY 2021.  HHS will continue to update its annual AFRs with the measurement program development status until the reporting of the improper payment estimate.

CMS Actions

CMS is committed to reducing improper payments in the Medicare FFS, Medicare Part C, Medicare Part D, Medicaid, and CHIP programs. While we have made some progress on reducing the improper payment rates in Medicare, we are not satisfied and more work needs to be done to achieve increased and consistent reductions in the future by expanding existing initiatives as well as innovative new processes. CMS’s program integrity strategy relies on a multifaceted approach that includes provider enrollment and screening standards, enforcement authorities, and advanced data analytics, such as predictive modeling. This strikes an important balance by preventing improper payments while reducing the administrative burden on legitimate providers and suppliers. For additional information on the improper payment rate estimates and/or the Agency’s actions to mitigate improper payments, please visit https://www.hhs.gov/about/agencies/asfr/finance/financial-policy-library/agency-financial-
reports/index.html

###

 
 

[1] CMS FY 2020 AFR improper payment data reported does not represent payments that occurred during the COVID-19 PHE period but represent claims submitted July 1, 2018 –June 30, 2019 for the Medicare FFS and Medicaid/CHIP improper payment measurement programs and data generated from Calendar Year 2018 for Medicare Parts C and D improper payment programs.

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Medicaid Fraud Division recovers $45M for MassHealth | Business | berkshireeagle.com

The article below has been highlighted and summarized by our research team. It is provided here for member convenience as part of our Curator service.

 
 

 
 

Curator summary

MA Fraud Unit reported $45M recovered for FY 2020.

 
 

Clipped from: https://www.berkshireeagle.com/business/medicaid-fraud-division-recovers-45m-for-masshealth/article_4f6820fe-238c-11eb-8129-7b69db10f48c.html

BOSTON — The state Attorney General’s Medicaid Fraud Division recently announced that it had recovered more than $45 million for MassHealth during federal fiscal year 2020, which ended Sept. 30.

The division secured 27 civil settlements with various entities, including home health agencies, mental health centers, ambulance providers, and individual doctors and practices. An additional 11 providers and individuals were charged criminally with defrauding MassHealth, and three individuals were charged criminally with abuse, neglect, or financial misappropriation in long-term care facilities.

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Medical Supply Company Settles Medicare Fraud Claims | San Fernando Valley Business Journal

CA, Fraud

 
 

The article below has been highlighted and summarized by our research team. It is provided here for member convenience as part of our Curator service.

 
 

 
 

Curator summary

CA DME company paid $500k to settle false claims charges by Medicare and Tricare programs.

 
 

 
 

Clipped from: https://www.sfvbj.com/news/2020/nov/05/medical-supply-company-settles-medicare-fraud-clai/

Valley Home Medical Supply Inc. in Canoga Park paid a $565,873 settlement after allegations arose that the company defrauded the federal government’s Medicare and Tricare programs.

According to a statement from the Department of Justice on Wednesday, Valley Home allegedly submitted false claims to the federal health care programs for unnecessary medical supplies and supplies never delivered to patients between July 2006 and May 2013.


The settlement resolved a whistleblower lawsuit filed by former Valley Home employee Kari Kitamura. She will receive $124,492 as a result of the settlement, or 22 percent of the settlement proceeds, the Department of Justice said. Valley Home will also pay Kitamura $80,000 for attorney’s fees.


Kenneth Greenlinger of Oxnard, who was chief executive of the company at the time, pled guilty in 2017 to two counts of health care fraud. Greenlinger served an eight-month federal prison sentence and was ordered to pay more than $1 million in restitution, according to the department said.


Assistant U.S. Attorney Lisa Palombo, a representative of the federal civil fraud section, worked with the Federal Bureau of Investigation and Department of Health and Human services on the case.

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Wise psychiatrist pleads guilty to federal health care fraud | Crime | timesnews.net

Fraud, TN, Behavioral Health

The article below has been highlighted and summarized by our research team. It is provided here for member convenience as part of our Curator service.

 
 

 
 

Curator summary

TN psychiatrist stole $500k for up-coded and fake office visits.

 
 

 
 

Clipped from: https://www.timesnews.net/news/crime/wise-psychiatrist-pleads-guilty-to-federal-health-care-fraud/article_aa4ce846-1fd2-11eb-9d45-b32478fef758.html

 
 

ABINGDON — A Wise psychiatrist has pleaded guilty to one count of health care fraud in connection with a six-year series of overbilling Medicaid and Medicare.

According to acting Western District U.S. Attorney Daniel P. Bubar, Uzma Ehtesham, 52, pleaded guilty in Abingdon U.S. District Court on Thursday to federal health care fraud after waiving her right to be indicted.

Bubar said that Ehtesham, between 2010 and 2016, billed Virginia Medicare and Medicaid $500,000 in total fraudulent payments for individual patient office visits — more than 50 a day at times — while claiming “extensive, time consuming and costly office visits” while actually seeing patients in groups of two to four in sessions lasting five to six minutes.

Ehtesham, as part of her plea agreement, is required to pay $1 million total in restitution, fines and forfeiture. She is scheduled for a Jan. 28, 2021, sentencing hearing.

The investigation against Ehtesham was conducted by the Virginia Office of the Attorney General’s Medicaid Fraud Control Unit, Norton Police Department, Southwest Virginia Drug Task Force, and Virginia State Police along with various local police departments, Virginia ABC and the Wise County and Norton Commonwealth’s Attorney’s office.

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Harris County doctor sentenced in $16M Medicare fraud scheme, authorities say

The article below has been highlighted and summarized by our research team. It is provided here for member convenience as part of our Curator service.

 
 

 
 

Curator summary

A Texas doc stole $16M from Medicare with a kickback scheme involving multiple home health agencies and patients who agreed to say that got home health services that were never provided.

 
 

 
 

Clipped from: https://www.click2houston.com/news/local/2020/11/19/harris-county-doctor-sentenced-in-16m-medicare-fraud-scheme-authorities-say/

 
 

A gavel (WDIV)

HOUSTON A Texas physician was sentenced to five years in prison Wednesday for a $16 million Medicare fraud scheme, federal officials said.

Yolanda Hamilton, M.D., 57, of Harris County, the physician-owner and operator of HMS Health and Wellness Center, PLLC, was sentenced by U.S. District Judge Keith P. Ellison of the Southern District of Texas.  Hamilton is ordered to pay $9.5 million in restitution.

Hamilton was convicted by a federal jury of one count of conspiracy to commit health care fraud, one count of conspiracy to solicit and receive health care kickbacks, and two counts of false statements relating to health care matters in October 2019.

Authorities said from January 2012 to August 2016, Hamilton conspired with others to defraud Medicare by signing false and fraudulent home health care paperwork that was used to submit fraudulent claims to Medicare, according to a news release about the sentencing.

Federal authorities said in a news release that Hamilton and her co-conspirators made it appear that the patients qualified and received home health care services, when they often did not.  Members of the conspiracy paid the patients to receive the home health care services, which were often medically unnecessary, not provided, or both, the news release said.  The evidence also showed that Hamilton required home health care agencies to pay an illegal kickback, which Hamilton disguised as a “co-pay,” in exchange for Hamilton certifying and recertifying patients for home healthcare services, according to the news release about the sentencing.

Hamilton typically would not release the home health care paperwork until the home health care companies or their marketers paid her the kickback, authorities said, citing evidence from the case.

Federal authorities said the scheme resulted in approximately millions in false and fraudulent claims for home-health services to Medicare and in Hamilton receiving over $300,000 in kickbacks.

To date, the Department of Justice said in its news release that several “co-conspirators” including marketers, patient recruiters along with doctors, and nurses who purchased plans of care and other signed medical documents from Hamilton have been charged, found guilty, or pleaded guilty to conspiracy to commit health care fraud and, or, paying or receiving kickbacks.

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Worcester woman arraigned on Medicaid fraud charges

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Curator summary

Massachusetts woman used an imaginary personal care assistant to bill for services provided to herself.

 
 

Clipped from: https://www.msn.com/en-us/money/other/worcester-woman-arraigned-on-medicaid-fraud-charges/ar-BB1aFhON

© Stock image Court news

WORCESTER — A city woman was arraigned Tuesday in Worcester Superior Court Tuesday on charges she defrauded MassHealth of $37,000 by creating a fictional personal care assistant. 

Amy Sutherland, also known as Amy Petrucelli, was released on personal recognizance on charges of medical assistance fraud and larceny over $1,200, records show. 

According to court documents provided by the office of Attorney General Maura T. Healey, which is prosecuting Sutherland, the 48-year-old Worcester woman, from 2017 to 2019, submitted time sheets for PCA services provided to her by an Amy Petrucelli.

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Petrucelli was paid $37,000 over that time frame, the AG said, but does not actually exist. The AG alleges the two are the same person, with Petrucelli being Sutherland’s maiden name. 

Court documents indicate the fraud was discovered after Sutherland was pressed by a skills trainer and doctor for contact information and questions about care she purported to receive from Petrucelli. 

“Sutherland refused to provide any information and ultimately withdrew from the PCA program in August 2019,” the prosecution wrote. “Sutherland has since tried to reenter the PCA program but has refused to allow for a surrogate to manage her services.”

MassHealth’s PCA program allows members with long-term disabilities to hire PCAs to assist them with daily activities. The consumer and the customer are required to submit bi-weekly timesheets for the work. 

In addition to having the same birthday, Sutherland and Petrucelli have the same mailing address, the AG said. 

Sutherland was released by Judge David Ricciardone on the condition that she not leave the state, that she turn in her passport and notify probation if she requests PCA services, records show. 

Court records Tuesday did not list an attorney for Sutherland. She is due back in court Jan. 26. 

Sutherland is one of three local residents charged in October after a crackdown of fraud in the state’s PCA program. 

This article originally appeared on Telegram & Gazette: Worcester woman arraigned on Medicaid fraud charges

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Business owner who orchestrated $13 million fraud upon North Carolina Medicaid program from Las Vegas pleads guilty, forfeits private jet | Internal Revenue Service

The article below has been highlighted and summarized by our research team. It is provided here for member convenience as part of our Curator service.

 
 

 
 

Curator summary

NC fraudster stole $10M using obituaries to get info needed to back bill NC Medicaid using the online NC Medicaid eligibility tool.

 
 

Clipped from: https://www.irs.gov/compliance/criminal-investigation/business-owner-who-orchestrated-13-million-fraud-upon-north-carolina-medicaid-program-from-las-vegas-pleads-guilty-forfeits-private-jet

Date: November 18, 2020

Contact:
newsroom@ci.irs.gov

Raleigh, NC — A Las Vegas, Nevada resident pleaded guilty today to Conspiracy to Commit Health Care Fraud, Conspiracy to Commit Money Laundering, and Aggravated Identity Theft, and further agreed to forfeit the proceeds of her crimes. These proceeds included up to $13,396,921.64, a British Aerospace Bae 125-800A Aircraft, a 2017 Aston Martin DB 11 sports car; a 2016 Ford F-150 Super-Crew pickup truck; real property held in the name of Assured Healthcare Systems in Hertford County, North Carolina; real property located in Charles County, Maryland; as well as various other items of designer jewelry and luxury items seized from the defendant’s penthouse condominium in Las Vegas.

According to court documents, Latisha Harron, also known as Latisha Reese Holt, originally from Eastern North Carolina, admitted to conspiring with her husband to carry out a massive fraud upon the North Carolina Medicaid Program (“NC Medicaid”) by billing the government for fictitious home health services. Harron admitted to then working with her husband to launder the proceeds of the fraud into, among other things, a private jet, luxury jewelry and clothing, and properties in Ahoskie and Rich Square, North Carolina.

According to the charges, Harron created, and was operating, Agape Healthcare Systems, Inc. (“Agape”) an alleged Medicaid home health provider, in Roanoke Rapids, North Carolina. As charged, to enroll Agape as a Medicaid provider, Harron fraudulently concealed her prior felony conviction for Identity Theft. In 2012, Harron moved out of North Carolina to Maryland. Despite that move, Harron continued to bill NC Medicaid as though Agape was providing home health services to North Carolina recipients.

As charged, in May of 2017, Latisha Harron moved to Las Vegas, Nevada to live with codefendant Timothy Mark Harron, and that the two were married in 2018. The indictment alleges that Timothy Harron was also a previously convicted felon, and that this fact was concealed from the NC Medicaid on enrollment documents. Harron pleaded guilty to allegations that Harron and her husband then worked together to expand the Agape fraud upon NC Medicaid, by fraudulently billing the program for more than $10 Million, just in the period between 2017 and 2019.

As charged, Harron admitted that she and her husband carried out the fraud by exploiting an eligibility tool that was entrusted only to NC Medicaid providers. Specifically, Harron and her husband searched publicly available sources, such as obituary postings on the internet by North Carolina funeral homes, to locate recently deceased North Carolinians. Harron admitted that the two would then extract from the obituary postings certain personal information for the deceased, including their name, date of birth, and date of death. Then, utilizing the extracted information, the defendants would then query the NC Medicaid eligibility tool to determine whether the deceased individual had a Medicaid Identification Number. If the deceased North Carolinian had a valid Medicaid Identification Number and was otherwise eligible for Medicaid coverage during their life, the defendants would use that individual’s identity to “back-bill” NC Medicaid, through Agape, for up to one year of fictitious home health services that were allegedly rendered prior to the death of the individual. NC Medicaid then disbursed millions to Agape, all of which flowed into accounts controlled by the Harron and her husband.

Harron admitted that she and her husband carried out the fraud via the internet from locations around the globe, including their corporate office building in Las Vegas, their penthouse condominium in Las Vegas, a corporate office in North Carolina, and from various hotels and luxury resorts in and outside of the United States.

Harron further pled guilty to laundering the proceeds of the Agape fraud into various luxury items. These expenses included a $900,000 wire for the purchase of a British Aerospace Bae 125-800A private jet, hundreds of thousands of dollars in Tiffany & Co. and Brioni clothing and jewelry, thousands of dollars on Eastern North Carolina business properties, and thousands of dollars in gym equipment.

Latisha Harron pleaded guilty to (1) Conspiracy to Commit Health Care Fraud and Wire Fraud, in violation of Title 18, United States Code, Section 1349, which carries a maximum punishment of up to 20 years in prison, (2) one count of Aggravated Identity Theft, in violation of Title 18, United States Code, Section 1028A, each of which carry a maximum punishment of not less than, nor more than, two years in prison consecutive to other sentences, and (5) Conspiracy to Commit Money Laundering, in violation of Title 18, United States Code, Section 1956(h), which carries a maximum punishment of 10 years in prison.

U.S. District Judge Richard E. Myers II accepted the plea. The Internal Revenue Service Criminal Investigation, the Federal Bureau of Investigation, the United States Department of Health and Human Services Office of the Inspector General, and the North Carolina Attorney General’s Office Medicaid Investigations Division, are all investigating the case.

Assistant U.S. Attorney William M. Gilmore is the prosecutor on this case. Assistant U.S. Attorney John Harris represents the United States with respect to forfeiture aspects of the case.

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Medicaid Improper Payment Rates Don’t Signal Fraud or Abuse | Center on Budget and Policy Priorities

The article below has been highlighted and summarized by our research team. It is provided here for member convenience as part of our Curator service.

 
 

 
 

Curator summary

CBPP wants you to think the massive fraud, waste and abuse in Medicaid compared to other health insurance programs is all just “paperwork” errors.

 
 

 
 

Clipped from: https://www.cbpp.org/blog/medicaid-improper-payment-rates-dont-signal-fraud-or-abuse

The Centers for Medicare & Medicaid Services (CMS) has released its 2020 Estimated Payment Error Rate Measurement (PERM) rate — which measures “improper” payments in Medicaid and the Children’s Health Insurance Program (CHIP) — but policymakers shouldn’t use it to justify imposing additional, burdensome verification and paperwork requirements or to distract from the larger problem of eligible people losing coverage and access to care. That’s because, despite how some program critics have represented them, these rates measure state procedural mistakes; they don’t necessarily mean a beneficiary did anything wrong or was ineligible for Medicaid.

The data that CMS released are based on audits of whether states are implementing their Medicaid and CHIP programs in accordance with federal and state policies. The PERM program estimates payment error rates in three areas: fee-for-service payments, managed care payments, and eligibility.

The overall PERM rate this year was 21.36 percent. While it’s higher than last year’s 14.9 percent, that’s mostly because CMS measured eligibility payment errors for more states, not because errors increased.

Neither the increase in, nor the level of, the PERM rate means that large numbers of ineligible people are getting coverage through Medicaid.

A finding of an improper payment doesn’t mean the payment was made to an ineligible person or for a service that shouldn’t have been provided. While PERM audits may find some incorrect eligibility determinations, most eligibility errors reflect paperwork problems or other procedural mistakes that can easily occur when eligible people enroll. In fact, the CMS report notes, “Medicaid and CHIP eligibility improper payments are mostly due to insufficient documentation to affirmatively verify eligibility or non-compliance with eligibility redetermination requirements,” rather than a finding of ineligibility. Many Medicaid errors also occur when states enroll providers — or providers bill for services — without following all relevant federal and state procedures.

For example, all of the following procedural mistakes would count toward the error rate, even though they wouldn’t result in ineligible people getting coverage:

  • Incorrect coding. A state inadvertently assigns the parent eligibility code to an eligible child. This is a clerical error but would count as an improper payment.
  • Incorrect federal match. A state claims the enhanced federal match rate available only for those enrolled through the Affordable Care Act (ACA) Medicaid expansion for a parent who would have been eligible for Medicaid even before expansion.
  • Insufficient documentation in a beneficiary’s case file. When conducting eligibility determinations, states can use electronic sources to verify the information on a Medicaid or CHIP application. An improper payment would occur if an eligibility worker fails to document the verification sources they used when they processed an application or the eligibility system fails to retain a proper record of the verification. According to CMS, state failure to document verification sources is one of the biggest drivers of an increase in improper payment rates.
  • Incorrect assignment to managed care. States are expanding the use of managed care in their programs by enrolling groups of people who previously received benefits through the state’s fee-for-service program, such as people with disabilities. A state incorrectly enrolling a beneficiary in managed care when they should’ve remained in fee-for-service — a mistake likely to occur when a state is transitioning thousands of beneficiaries to managed care — would count as an improper payment.
  • Incorrect health insurance program assignment. A state incorrectly determines a beneficiary eligible for CHIP when they should have been determined eligible for Medicaid. CMS cited this as a driving factor behind an increase in the CHIP improper payment rate.

States can also be found in error when their actions are based on a misunderstanding of policy, or even when CMS changes its interpretation of federal policy. That happened last year in Idaho. Based on past CMS guidance, Idaho automatically renewed beneficiaries who had previously attested that they had no income and for whom electronic data sources also show no income. But during last year’s PERM audit, CMS informed Idaho that its process didn’t comply with federal requirements and that all such renewals would count toward its PERM rate.

Idaho’s experience also illustrates the harm when states are pushed to impose new and burdensome verification requirements. Because of CMS’ feedback, Idaho has changed its verification process, requiring additional documentation from beneficiaries before renewing their coverage. These changes have caused beneficiaries, including eligible children with complex health care needs, to lose coverage and forgo needed medical care while trying to re-enroll in Medicaid.

Before COVID-19, Medicaid enrollment had been declining, and uninsurance had risen for both children and adults — trends the Trump Administration helped drive with its push to increase verification and paperwork requirements. Instead of maintaining this harmful approach, the Biden Administration should recognize that program integrity also requires making sure that eligible people can get and stay covered and should work with states to streamline eligibility and enrollment processes while maintaining accuracy.

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Oak Park Doctor, Niece Accused In $1.2M Medicaid Fraud Case | Oak Park, IL Patch

The article below has been highlighted and summarized by our research team. It is provided here for member convenience as part of our Curator service.

 
 

 
 

Curator summary

An Illinois fraudster stole $1.2M from Medicaid with a mental health services-not-provided scheme.

 
 

Clipped from: https://patch.com/illinois/oakpark/oak-park-doctor-niece-accused-1-2m-medicaid-fraud-case

A Cook County doctor and his niece from Matteson are facing charges in a massive medicaid fraud case.

 
 

 

OAK PARK, IL — A doctor from Oak Park and a Matteson woman are facing charges stemming from accusations they defrauded the state out of more than $1.2 million in Medicaid funds, Attorney General Kwame Raoul announced Monday, in a news release.

According to Raoul, 66-year-old Dr. William McMiller and his niece, 36-year-old Jonise Williams, are facing charges in Cook County Circuit Court, including theft of government property by deception and theft of government property by unauthorized control, each a Class X felony punishable by six to 30 years in prison. Each are also facing charges of felony vendor fraud, and felony forgery, according to the news release.

McMiller and Williams also face a fine of up to $25,000 for each charge, Raoul announced.

McMiller is a licensed physician who owns Dr. Bill’s Learning Center, which has two locations in Chicago and Oak Park. According to the news release, both centers offer tutoring services to children and clinical therapy and psychiatric services. According to the news release, Williams handled the billing at Dr. Bill’s Learning Centers, and Williams and McMiller submitted several claims to the Illinois Medicaid program for psychotherapy and medical services that weren’t provided.
 

“Our Medicaid program serves some of the state’s most vulnerable residents and children,” Raoul stated, in the news release. “I am committed to partnering with other agencies to take action against individuals who use the program to defraud the people of Illinois.”

The Illinois State Police Medicaid Fraud Control Unit opened the investigation after receiving a referral from the Illinois Department of Healthcare and Family Services (HFS) Office of the Inspector General, the news release said. The HFS Office of the Inspector General then raised an allegation of fraud against McMiller based on the “normal number of service hours that he billed each day,” the news release stated.
 

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Medicaid fraud charges for owner of Harlan rehab facility – Harlan Enterprise | Harlan Enterprise

The article below has been highlighted and summarized by our research team. It is provided here for member convenience as part of our Curator service.

 
 

 
 

Curator summary

A KY Medicaid fraudster stole from Medicaid AND from Medicaid members (by charging them for services covered by Medicaid).

 
 

Clipped from: https://www.harlanenterprise.net/2020/11/24/medicaid-fraud-charges-for-owner-of-harlan-rehab-facility/

BY TOM LATEK, Kentucky Today

A two-year investigation has led to federal health care fraud charges against the owner of rehabilitation facilities in eastern Kentucky.

Eugene Sisco III, 35, of Pikeville, the owner of several rehabilitation facilities in Pike, Floyd and Harlan counties, as well as a urine drug testing lab in Pike County, is accused of illegally charging patients cash for services that were covered by Medicaid and for which he had been fraudulently billing Medicaid.

According to a federal indictment, it is alleged that Sisco has received over $3,000,000 in cash paid to him by patients seeking treatment for addiction between 2016 and 2018.  Federal search warrants were executed on five of Mr. Sisco’s businesses in February of 2020.

When questioned by employees at the facilities about having the patients pay cash, since the services were under Medicaid, the indictment states Sisco would lie and say services such as counseling or urine drug testing were not covered by Medicaid.

The indictment accuses Sisco of charging patients $200-$300 for the same services for which he was also billing Medicaid. He is also alleged to have charged the Medicaid members $225 per month for counseling services, for which he was also billing the federal agency, as well as for urine drug tests for a company he owned, which again were also submitted to Medicaid for payment.    

Sisco was indicted by a federal grand jury on one count of federal wire fraud, which carries a maximum of 20 years in federal prison, as well as health care fraud, which has a maximum of ten years in federal prison if convicted.

This was a joint investigation by Appalachia Narcotics Investigations, Diversion Enforcement Task Force, the FBI HEAT Task Force (All Appalachia HIDTA Task Forces) and the United States Attorney’s Office in Lexington. They were assisted by the Kentucky State Police, Harlan County Sheriff’s Office, Harlan Police Department and the Kentucky Office of the Attorney General Medicaid Fraud Control Unit.

Sisco is scheduled to be arraigned Dec. 7 at U.S. District Court in London.

About Whitney Leggett

Whitney Leggett is managing editor of The Winchester Sun and Winchester Living magazine. To contact her, email whitney.leggett@winchestersun.com or call 859-759-0049.

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