Gov. Terry E. Branstad announced today that an Iowa Medicaid initiative
saved taxpayers $41 million in fiscal year 2013. That brings the total
three-year savings of the program integrity effort to more than $86
million.
“The savings are six times greater than the overall cost of the program
integrity contract, and $18.5 million above the savings target. That’s
very good news for taxpayers,” said Branstad. “These savings help us
provide better care for 400,000 Iowans in need, without reducing
provider rates or trimming services.”
The savings were achieved through a three-year, $14 million program
integrity contract awarded to Optum of Eden Prairie, Minn. Optum, which
manages most of the program integrity work for Iowa Medicaid Enterprise,
will continue its program integrity efforts for FY 2014 in the first of
two performance-based option years under the contract.
Iowa Medicaid Enterprise Director Jennifer Vermeer said savings under
the program integrity contract include both “cost avoidance,” which is
money not spent because claims errors or fraudulent activities are
caught in advance, and “recoveries,” which refers to funds
inappropriately billed to Medicaid that providers must repay.
A strong emphasis on avoidance is especially beneficial to Medicaid
programs, since it is less costly than “chasing” inappropriately paid
claims in an effort to recover funds. Optum discovered inappropriate
behavior by both providers and beneficiaries.
“We are pleased with the innovative approaches Optum has instituted,”
Vermeer said. “We’ve put those who deliberately seek to defraud the
system on notice that we’re using some very sophisticated techniques to
thwart their efforts. For those who make mistakes or are misinformed,
there’s an educational component to the program that our Medicaid
providers have found helpful.”
The majority of the approximately 20,000 Medicaid providers bill
appropriately and understand how the program works. But, Vermeer said
the few who are fraudulent can cost taxpayers millions.
Some examples of potential fraud or inappropriate claims and payments
that Optum analysts found include:
-
Questionable In-home Respite Care Claims: Iowa Medicaid pays
for some in-home non-medical services to families with disabled
children, who can’t be left alone, to give parents an opportunity to
shop or run errands. Program integrity analysts found that some of
these companies were billing for services not provided, submitting
bills that show they were at two different households at the same
time, or inflating the time they were at a household. In addition,
parents sometimes had siblings or other relatives establish a
“storefront day care center,” and would bill Medicaid for in-home
respite care through the company. Optum’s work has resulted in a
change in the law that now prevents billing through a day care center.
-
Questionable Chore Claims: People who are eligible for
Medicaid-paid nursing home care can sometimes remain in their homes
with the help of various services, including chores such as lawn
mowing and snow removal. Program integrity analysts found that some
chore providers billed for snow removal on days it did not snow, or
billed excessively for mild snowfall. In addition, analysts compared
plot plans with lawn-mowing claims and discovered that often,
providers would bill for far more hours than it would take to mow a
small lawn. In one case, analysts found that one provider was
submitting bills of $700 per month for lawn care at one single-family
address.
-
Questionable Durable Medical Equipment Claims: Generally,
durable medical equipment, which includes items such as oxygen tank
dispensers, home hospital beds, wheelchairs, etc. – are either
purchased outright or rented by Medicaid, whichever is more
cost-effective. In some cases, for example, a patient may require a
wheelchair or a nebulizer for only a short period of time, and renting
is more cost-effective than buying. Program integrity analysts found
many instances of companies submitting rental claims long past when
purchasing the item would be less expensive. In other cases, companies
would submit rental claims even after Medicaid had already purchased
the item from them, meaning they were receiving double payments.
-
Questionable “Swing Bed” Claims: Critical access hospitals –
defined as smaller, rural hospitals – at times keep injured or very
sick patients in more expensive “swing bed” units, which can cost
$4,000 per day, rather than moving them to lesser expensive care
settings in the same hospital or to different facilities. For example,
in several rehab cases, the level of care required could have been
handled just as well in a nursing home setting, which costs Medicaid
about $250 per day. Program integrity analysts focused on cases where
patients were kept in “swing beds” for more than a year – generating
up to $1.5 million in Medicaid bills – and found many cases of
inappropriate billing by hospitals. The program’s efforts resulted in
a legislative change that now requires some prior authorization before
patients are placed in swing beds.
In addition, Vermeer said there were other Medicaid fraud areas in which
IME is collaborating with law enforcement officials, who are
investigating based on information from Optum analysts. Steve Larsen,
executive vice president of Optum Government Solutions, said Iowa’s
Medicaid program has become a national model in program integrity.
“The state shares our philosophy about payment accuracy – every taxpayer
dollar must be properly spent, and every provider must be properly paid
for the critical work they do,” Larsen said.
For more information:
Amy Lorentzen McCoy
Iowa Department of
Human Services
515-281-4848
amccoy@dhs.state.ia.us
For more information on Optum:
Steve Puleo
Optum Corporate
Communications
781-419-8553
steve.puleo@optum.com
About Iowa Medicaid Enterprise (IME)
IME, a combination of
state employees and commercial vendors, is responsible for managing a
Medicaid program that covers nearly 450,000 beneficiaries and 38,000
care providers. IME unites state staff and “best of breed” contractors
into a performance-based model for administration of the Medicaid
program.
About Optum
Optum (www.optum.com)
is a leading information and technology-enabled health services business
dedicated to helping make the health system work better for everyone.
Optum comprises three companies – OptumHealth, OptumInsight and OptumRx
– representing more than 35,000 employees worldwide who collaborate to
deliver integrated, intelligent solutions that work to modernize the
health system and improve overall population health.
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Copyright Business Wire 2013