Audit says tracking of Medicaid fraud not sufficient
The Department of Human Services isn’t doing an adequate job of dealing with fraud in the Medicaid system, according a new report released by the state auditor’s office.
“It was apparent to us that central Medicaid provider and recipient fraud and abuse was not a high priority for the department,” Gordy Smith, audit manager for the auditor’s office, said in his report to legislators. “Rather it seems that DHS when they found potential cases of fraud or abuse they treated them as errors rather than as potential fraud and abuse that should be investigated further.”
The 23-page report reviewed the system over a three year period. Maggie Anderson, director of medical services for the department, said the audit gave the department a lot of good feedback, and DHS agreed with most of the recommendations in the report. Many of those interviewed blamed a lack of resources for the problems identified,
In presenting the report to legislators, Smith said the department did not promote an environment that encouraged employees to look for fraud and in interviews, some DHS employees said “they did not believe a fraud or abuse unit existed within DHS.”
While the unit does exist, Smith questioned the qualifications of the person leading the unit and said they have yet to do a full fraud investigation.
Smith said the individual did not meet federal requirements set out for the position and lacked much of the training and licensure necessary to head up a fraud unit.
While the unit does investigate claims, Smith said they are not referring cases for further investigation and prosecution.
When asked by state legislators about the extent of the fraud, Smith said he didn’t have an estimate as that was not the point of the audit.
“I’m confident in saying a lot of the errors Human Services says are errors, are errors. They’re billing errors,” Smith said. “However I do think there are indications where if we had followed them through, if that were our job, I would’ve been pretty confident out front that you’d have a case.”
Smith pointed to an ambulance group that was overpaid by more than $3,000 but said there were other instances where the department was working to recoup $160,000 in inappropriate billings.
Some legislators were skeptical as to the amount of fraud and blamed the problem on a complicated paper-based billing system, which the department is working to transition to going online.
“Their people are good as what they do,” said Sen. Judy, Lee, R-West Fargo, of in-home care providers, “But to say they’re not accountants is an understatement.”
The audit report also criticized the department for getting a waiver to opt-out of a federal program that would establish a separate Medicaid fraud unit to be housed outside of DHS, something the report recommended for objectivity.
Smith said North Dakota is the only state in the U.S. to not to participate in the program, which is funded primarily with federal funds and is usually housed in the attorney general’s office to further the opportunities for investigation and prosecution.
While the state got permission to opt out of the program in 1994, Smith said the circumstances surrounding that decision have changed, and the report recommended submitting a new request.
Anderson said a bill that would have created a new fraud unit was introduced last legislative session but it failed in the House.
Anderson said they will confer with federal authorities as to whether there are now enough claims processed to justify having a fraud unit.
“We’ll change if we’re told we have to change,” Anderson said after the hearing, but if not the status quo will remain. She said the cost of the program in South Dakota is about $400,000.
Anderson said the new health care law will be bringing in some of the resources the department needs to deal with some of the recommendations from the state auditor.
The new law will create the same type of fraud review that now exists under Medicare and will establish a unit devoted entirely to fraud.
Anderson said there are ample training opportunities over the next year, and the head of their current fraud unit should have the proper qualifications and licenses by the end of the year,
The department also is going to add a report fraud option to its website and toll free number.
(Reach reporter Rebecca Beitsch at 250-8255 or 223-8482 or rebecca.beitsch@bismarcktribune.com.)
North Dakota Medicaid Auditor General Report 2010
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