Center for Program Integrity

Peter Budetti, Deputy Administrator

Director, Center for Program Integrity

National Conference of State Legislators

Spring Forum

April 14, 2011

Center for Program Integrity’s Strategic Direction

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Overview of theMedicaid Integrity Group

Deficit Reduction Act (DRA) of 2005 established the

Medicaid Integrity Program – Social Security Act § 1936

– 100 Federal FTEs

– $75M annual appropriation

– Provide effective support and assistance to States

– Contract with entities to:

Review Medicaid provider claims

Audit Medicaid providers

Identify overpayments

Educate providers, beneficiaries and others

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Overview of theMedicaid Integrity Group

Oversight and Technical Assistance to States

– Boots on the Ground

– State Reviews

– Medicaid Integrity Institute

First ever MFCU-PI course - June 2011

National Medicaid Audit Program

– Medicaid Integrity Contractors

– Transitioning from traditional “Federal” audits toward more

collaborative audit projects with States

Data Analysis

– Use of algorithms and other analytics to detect and identify

improper payments – provider level and State system level

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Recovery Audit Contractor (RAC) expansion to Medicaid

Section 6411 of the Affordable Care Act authorizes the

expansion of the Recovery Audit Contractor (RAC)

program to both Medicaid and Medicare Parts C & D.

– Requires States to contract with one or more RAC contractors

for Medicaid.

– Medicaid RACs are State-administered.

– States must have established a Medicaid RAC program no later

than December 31, 2010.

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Medicaid RAC Program Characteristics

Must identify and recover overpayments and identify

underpayments.

States must pay Medicaid RACs on a contingency fee

basis for the identification of overpayments and

underpayments.

States will determine the contingency fee rate based on

Federal guidelines.

Payments to Medicaid RACs will be made only from

amounts recovered.

Secretary may grant States exceptions on a case-by-case

basis.

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States must have an adequate appeals process.

– May use current appeals process, as long as providers are

ensured due process

Medicaid RACs must coordinate with other auditing

entities, including Federal and State law enforcement

agencies.

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Medicaid RAC Program Characteristics (cont.)

RAC Implementation Activities To Date

State Medicaid Director Letter (#10-010) issued 10/1/2010.

Notice of Proposed Rulemaking 6034-P, “Medicaid

Program; Recovery Audit Contractors,” published on

11/10/2010; comment period closed 1/10/2011.

Outreach efforts to provide guidance to assist States with

their RAC implementation efforts:

Educational DVD: Medicaid RACs: Are You Ready?

Webinar for States: Medicaid RACs: Procurement Tips

State Call: Lessons Learned from the Medicare RAC

Implementation

RAC At-A-Glance website:

http://www.cms.gov/medicaidracs/home.aspx

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Enhanced Provider Screening & Enrollment Requirements

Final Rule with comment published on 2/2/2011 and takes

effect 3/25/2011.

State Medicaid and CHIP agencies must follow the same

process that has been established for Medicare.

Final rule establishes the minimum requirements – States

may impose additional requirements.

States may rely on the results of provider screening

performed by Medicare or another State.

Screening continuum –

– low risk providers = licensure/ database check

– Med risk providers = licensure/database check & site visit

– High risk providers = licensure database check, site visit &

criminal history check and fingerprinting (not implemented yet).9

Enhanced Provider Screening & Enrollment Requirements (cont.)

Other provisions in Final Rule with comment:

– Application fee for institutional providers

– Temporary enrollment moratorium

– Payment suspension when there is a credible allegation of fraud

States now mandated to make referrals to the MFCU in addition to

suspending payments

Compliance with CMS fraud referral standards is now a regulatory

requirement

MFCU requirements in 42 CFR 1007.9

– States must terminate any provider that has been terminated by

Medicare or by another State Medicaid or CHIP program

– Medicaid ordering/referring practitioners must be enrolled in the

State’s Medicaid program

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MFCU Data Mining Activities

Florida’s 1115 Waiver to permit MFCU data mining was

approved in July 2010.

– CMS and OIG plan to do an early evaluation of the waiver’s

effectiveness.

HHS-OIG NPRM to permit MFCUs to receive enhanced

match for data mining activities. Published 03/17/2011.

http://edocket.access.gpo.gov/2011/2011-6012.htm

MFCU access to the Medicaid Integrity Group Data

Engine

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Executive Order 13520: Reducing Improper Payments

Issued November 2009

Purpose:

– Reduce improper payments be eliminating payment errors,

waste, fraud, and abuse in major Federal program.

– Continue to ensure our programs serve the intended

beneficiaries.

– Balance between decreasing improper payments and ensuring/

promoting access.

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E.O. 13520 Requirements

Transparency and Public Participation

– Designate high priority programs

– Centralized website for reporting waste, fraud & abuse:

www.payment accuracy.gov

– More frequent measurement and reporting

Agency Accountability

– Agency-designated official accountable for meeting targets

– Quarterly reporting

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E.O. 13520 Requirements, Continued

Incentives for Compliance

– States identify and reduce errors

– States focus on error reductions v. compliance

– Contractors charged damages for improperly invoicing the

Government

– Assistance from CMS/Medicaid Integrity Group

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Measurement

Identification of National Focus Areas:

– Nursing homes

– Inpatient hospital

– Home health

– Pharmacy

State Payment Accuracy Improvement Groups (PAIGs)

Special Focus States

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EO in Action: State PAIGs

Address national focus areas and/ or State-specific issue

Devise common method of measurement

CMS will provide data analysis and audit resources

Develop recommendations for improving performance

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State PAIGs, Continued

Conduct baseline measurement for Cluster

Implement Corrective Actions

Conduct second measurement for Cluster

Publish project results including both Cluster

Measurements

Contact Robb Miller if interested: (312) 353-0923

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Rx Education PAIG

5 States – DE, KY, MD, NC, WV

Using State-provided MSIS data

Intervention: Provider education tailored to mitigate the

identified vulnerabilities in each State

Publication of results slated for 2012

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National Fraud Prevention Program

Develop

Test

Refine

Predictive Modeling

Risk

Scoring

Solution

Including:

Claims

Enrollment Records

Investigations

Complaints

Stolen IDs

Alert

Management SystemProgram Integrity

Contractors

Data

National Fraud Prevention Program

Prevent the payment of claims for reimbursement

that have been identified as potentially wasteful,

fraudulent, or abusive.

Integrate predictive modeling as part of an end-to-

end solution that triggers effective, timely

administrative actions by CMS.

Assure that analytics are effective (minimize false

positives), risk-based, and efficient.

To be adapted to Medicaid in 2014

National Fraud Prevention Program

Implementing the Risk Scoring

Solution into Claims Processing

Risk

Scoring

Solution

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Medicare

Administrative

Contractor,

Shared Systems

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Common

Working File -

Consolidated

Data

Edits

3

456

Questions

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