1Hancock Eliminating Waste, Fraud, and Abuse in Public Programs: Indiana’s Promising Practice National Academy for State Health Policy 24 th Annual State.

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Eliminating Waste, Fraud, and Abuse in Public Programs: Indiana’s Promising Practice

National Academy for State Health Policy24th Annual State Health Policy Conference

October 3-5, 2011Kansas City, Missouri

Emily F. Hancock, RPh, PharmD, MPAOffice of Medicaid Policy and Planning

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Define the Problem

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The Problem Illustrated

• The U.S. spends more than $2 trillion on healthcare annually. At least 3 percent of that spending —or $68 billion —is lost to fraud each year. (National Health Care Anti-Fraud Association, 2008)

• Medicare and Medicaid made an estimated $23.7 billion in improper payments in 2007. These included $10.8 billion for Medicare and $12.9 billion for Medicaid. (U.S. Office of Management and Budget, 2008)

• Medicare paid dead physicians 478,500 claims totaling up to $92 million from 2000 to 2007. These claims included 16,548 to 18,240 deceased physicians. (U.S. Senate Permanent Committee on Investigations, 2008)

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Indiana’s Systematic Approach to

Combating Improper Payments

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Current Program Integrity EffortsRecoveries & Avoidances SFY 11

Program Dollars

Third Party Liability $ 112,417,070

Estate Recovery $ 12,199,259

Pharmacy Audits $ 3,828,569

Surveillance and Utilization $ 2,341,263

Long Term Care $ 170,192

Total Program Integrity Efforts

$ 130,956,353

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Prosecutions and Restitutions• Member Fraud CY2010

– Bureau Of Investigations (BOI) substantiated 138 Medicaid Fraud Cases

– 24 cases were prosecuted– 11 received felony convictions– Court ordered restitution totaling $24,554

• Provider Fraud SFY11– Medicaid Fraud Control Unit (MFCU) investigated 266

fraud referrals

– Prosecuted 12 providers, 10 received Criminal Penalties

– Recovered $36,098,607

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Expand program integrity efforts in Indiana Establish strong partnership with innovative

Fraud and Abuse Detection System (FADS) contractor

Leverage expertise with State staff working alongside contractor

Combine technology, expert consulting and auditing services

Develop new data mining processes Coordinate activities of agency stakeholders

New Program Integrity Strategy

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Focus on Results

Implement FADS on-timeImprove financial return on investment

Recoveries and cost avoidance

Enhance provider relationsAdvance program integrity effectiveness

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Prevention: Provider Improper Payments

• Provider Enrollment– New enrollment processes and risk categories

• Provider Education– Educational seminars, bulletins, and newsletters

• National Correct Coding Initiative– More than 1.3 million new system edits in place

• Pre-payment Review– Validating claims before payment is made

• New ACA Regulations– Mandatory payment suspensions

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Prevention: Member Misrepresentation & Overutilization

• Eligibility data matches– Pre-enrollment and redetermination

• ACA eligibility data in 2014– Access to federal databases to validate eligibility

• Member fraud hotline– For both members and providers

• Right Choices Program (RCP)– Controls members utilization

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Detection: Improper Payments

• Continual, rigorous data analysis and investigation– Primary focus on Medicaid claims data– Link data across multiple sources

• Use advanced data mining techniques and algorithms– DataProbe– J-SURS– Other Software Tools

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Reporting: Fraud and Abuse

• i-Sight Case Tracking System– Provides workflow-driven solution for

documentation and tracking of provider and member fraud cases

– Supports information sharing to ensure collaboration on cases

– Allows for timely and accurate reporting of results for all Program Integrity activities

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Emphasis: Member Utilization

• How to manage resource access, cost and quality

• How to gain provider buy-in• How to operate lock-in program

• One primary medical provider (PMP) • One pharmacy • One hospital (for non-emergency visits)

• How to evaluate return on investment

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Restricted Card BecomesRight Choices Program

• Regulatory Authority– Indiana Administrative Code, 405 IAC 1-1-2(c)

• Program Purpose– Identify members who use Medicaid services more

extensively than peers– Implement restrictions for members who would benefit

from increased care and coordination

• Restricted Card Program operated from 2000 until redesigned RCP launched in 2010

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What Changed?:Domain Right Choices Program

Philosophy Interventional

Member Identification And Enrollment

Electronic standards for utilization thresholds & scoring methodology.

Member Maintenance Uniform policy manual

Member Exit Exit Review Summary with provider involvement

Data Flow and System Integration

Web interchange tool and reports

Detecting and Reporting Misuse, Fraud, and Abuse

Stakeholder involvement within creation of policy and procedure

Program Evaluation Metrics Nine formalized performance metrics

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Current Right Choices Program

Enrollment Methodology1. Overutilization of ER, # of PMP selections, # of Prescribers, # of Pharmacies

2. Overutilization of Controlled Substances together with multiple prescribers and pharmacies

3. Automatic placement due to suspected or alleged fraud or State guidelines for mental health drugs

a) Five or more mental health drug claims in 45 days

b) Benzodiazepines from three or more prescribers in 90 days

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RCP Program Ramp-up

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Priority Screening and Assessment

• Members with Utilization at 3rd Standard Deviation of the Mean– Primary Medical Provider (PMP) selections

– Emergency Room visits

– Prescribers

– Pharmacies

• Prioritize Screening and Assessment

– Members with xs ER utilization plus 3 other parameters

– Members with xs ER utilization plus 2 other parameters

– Members with xs ER utilization plus 1 other parameter

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Why is the RCP Important in Managed Care Environments?

• Focuses coordinated care• Encourages medical home concept• Leverages case management impact• Reduces waste, fraud, and abuse

– Total amount paid - ↓$257.56 pmpm– Amount paid - ER visits - ↓44%– Amount paid - physician office visits – ↓48% – Pharmacy claim count – ↓2%

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Future Considerations

– Automated review of Medicaid application data

– Automated pre-payment review of claims– Emerging technology application– Right Choices Program expansion– Consequences for Medicaid program

violation

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Conclusion

Thank you for your interest