• Investing in Our Next Generation
• A Partnership to Improve Behavioral Health in Louisiana
• Doubling Down on Fighting Fraud
• Planning for Better Health

Doubling Down on Fighting Fraud

The first speech I made on my very first day as the Secretary of the Louisiana Department of Health and Hospitals was to members of the National Association of Medicaid Program Integrity (NAMPI). I outlined a serious commitment to combat waste, fraud, and abuse across our health care system during my tenure, particularly within the taxpayer funded Medicaid program.

In calendar year 2010, nearly 99 million claims were submitted to the state by health care providers, resulting in Medicaid payments of more than $5.5 billion. We know the majority of these providers deliver high quality services and do not perpetrate fraud or abuse the system via overutilization and other wasteful practices. However, DHH has recently taken steps to enhance our ability to detect and root out the fraudulent and wasteful behavior that does occur.

Our current system pays providers very quickly, often paying a clean claim in a matter of a few days. Too often, our team at DHH is forced to play the “pay and chase” game of fraud detection and recoupment after the payment is made. Simply deducting from future payments isn’t always possible when providers go out of business or stop making Medicaid claims. In fact, our current accounts receivable balance for recoupments sought against closed providers is nearing $6.5 million. This system is not good business for the state, providers, recipients or taxpayers.

I’ll be the first to offer my congratulations to the success our program integrity team has achieved even within this limited framework. Since FY 2007, there has been a nearly 500 percent improvement in the amount of dollars recovered. In the last fiscal year alone, we nearly doubled recoupments year over year. Unfortunately, that still only amounted to $8.5 million, less than .0013 percent of the annual Medicaid budget. It is estimated nationally that as much as 10 percent of Medicaid and Medicare expenses are diverted by wasteful, fraudulent, and abusive activities. Clearly, there is more that we can do and, through an aggressive realignment of our fraud and abuse system, DHH strives to significantly increase cost avoidance and recoveries. Our goal is to stop fraud in its tracks by denying improper claims before they are paid.

This enhanced pre-payment review process will complement the front-end claims processes DHH currently uses and will help identify areas that require strengthening of policy and additional system editing. We have established a goal of $12 million to be recovered through the pre-payment (cost avoidance) and post-payment review structures for FY 2012 (a 50 percent increase). As we move forward with the implementation of this process, a gradual transition to a new payment schedule will minimize the financial impact on the provider community. This will also align with the Coordinated Care Network (CCN) prompt payment provisions. (Providers can learn more about this transition at www.lamedicaid.com.)

We are also working with other partners to attack fraud and abuse at every corner of our health care system. We also want to make sure we are making maximum use of technology to detect patterns of fraud. By working smarter, we can improve our return on investment in program integrity functions without increasing staff. The department is currently developing a project with worldwide IT leader Lexis Nexis to improve the integrity of our home and community-based services programs. Lexis Nexis will screen all providers who render long-term care, personal care attendance and supervised independent living services and will provide an analysis checked against numerous state and national databases that indicate potential risk of fraud. This will allow DHH to use a scalpel-like approach to fight fraud, rather than a blunt axe that could even affect our hard-working and honest providers.

As always, we will continue to work closely with the Attorney General’s Medicaid Fraud Control Unit to prosecute those individuals who are found to be committing fraud within Medicaid. In FY 2011 alone, 20 percent of case closures resulted in a referral to the Medicaid Fraud Control Unit. By and large, we have dedicated and caring providers—and we need their help in this fight. If you know of or suspect any fraud or abuse within the Medicaid program, provider or recipient, I strongly encourage you to call our fraud hotline at 1.800.488.2917 or visit the DHH website at www. dhh.la.gov and search for “Report Fraud.” Those who steal from Medicaid are robbing taxpayers, providers, and recipients.