Prevention, Detection, and Recovery of Improper Payments Home and Community Based Programs for the Elderly and Individuals with Disabilities Department.

Prevention, Detection, and Prevention, Detection, and Recovery of Improper PaymentsRecovery of Improper Payments

Home and Community Based Programs for the Elderly and Individuals with Disabilities

Department of Health and Department of Health and HospitalsHospitals

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Why We Did This AuditWhy We Did This Audit

• Increasing improper payments over the years

• Repeat financial audit findings

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Why We Did This Audit (cont)Why We Did This Audit (cont)

• Increasing costs in Long-term Personal Care Services Program– Population rose from

3,000 in FY 2005 to FY 14,000 in FY 2009

• Vulnerability of populations in these programs

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Programs ReviewedPrograms ReviewedProgram Summary

  Long-term Personal Care

Services (LTPCS)

New Opportunities Waiver (NOW)

Elderly and Disabled Adults Waiver (EDA)

Eligible Population

Elderly and adults with disabilities

Individuals with developmental

disabilities or mental retardation who qualify

for institutional care

Elderly and adults with disabilities

Slots approved No maximum 4,603 8,682

Individuals receiving services

12,500* 4,300 7,533

Number on waiting list

N/A 18,920 9,190

Average cost per recipient

$16,623 $29,620 $62,246

FY 2011 expenditure forecast

$184,589,989 $104,450,746 $383,166,489

Number of providers

657 603 1,513

Maximum service hours per week

32

No maximum service hours. $40,046 is the

maximum annual amount per recipient

No cap for the total amount of all NOW

services per recipient, but there are limits for individual NOW

servicesSource: Prepared by the legislative auditor’s staff using information provided by DHH.

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GAO’s Fraud Prevention ModelGAO’s Fraud Prevention Model

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Audit ObjectivesAudit Objectives

• What enhancements could DHH make to improve its processes to prevent or deter improper payments in home and community based programs?

• What enhancements could DHH make to improve its processes to detect and recover improper payments?

• What are some ways DHH could save money in the LTPCS program?

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General MethodologyGeneral Methodology• Used ACL and Excel to analyze various databases

to test sufficiency of processes– Medicaid claims data showing services paid– Data on recipients– Timesheet data on direct care workers providing

services

• Compared Louisiana’s processes to practices in other states known for having identified large amounts of improper payments

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Objective 1: Prevention of Objective 1: Prevention of Improper Payments - FindingsImproper Payments - Findings

• Overall, DHH had developed some processes, such as prior authorization of services, multiple MMIS edit checks, and provider enrollment to help prevent improper payments; however, all of these processes needed improvement

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Prevention of Improper PaymentsPrevention of Improper Payments-Overlapping Times-Overlapping Times

• Used ACL to analyze time coding of direct care workers and found between $700,000 to $1.3 million in improper payments to direct care workers who worked for 2 different companies– 1,563 direct care workers claimed overlapping

times

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Prevention of Improper Payments Prevention of Improper Payments –Duplicate Billing–Duplicate Billing

• Identified nearly $200,000 in improper payments for direct care workers who claimed they cared for individuals in their home while the individual was in hospital or in nursing home

• Prepayment reviews would help DHH intercept claims that meet certain criteria prior to being paid

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Prevention of Improper Payments Prevention of Improper Payments – Prior Authorization of Services– Prior Authorization of Services

• Identified nearly $20,000 in improper payments for companies who used prior authorization numbers from previous recipients resulting in two providers billing for same person

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Prevention of Improper Payments Prevention of Improper Payments – Provider Quality– Provider Quality

• DHH was not in compliance with requirements of the Affordable Care Act which required periodic re-enrollment of providers, site visits, and criminal background checks

• Could also enhance provider quality by requiring surety bonds and providing training

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Prevention of Improper Payments Prevention of Improper Payments – Call in Systems– Call in Systems

• Requires providers to call-in from recipients home phone

• South Carolina and Florida have implemented and have seen cost savings due to reduction in improper payments

• Louisiana is using in childcare assistance program

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Prevention of Improper Payments Prevention of Improper Payments – Fines and Penalties– Fines and Penalties

• Current penalty structure insufficient

• DHH rarely imposed fines – Only imposed fines on 3% of

cases from 2005 to 2010– Only imposed $96,000 in fines

for 1,090 cases despite identifying $4.7 million in improper payments in these cases

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Prevention of Improper Payments – Prevention of Improper Payments – Multiple OffensesMultiple Offenses

• 65% of providers had multiple violationsProvider Name Date Closed Sanction(s)

Amount Recovered

Fines Imposed

NEW HORIZONS 4/6/2006 Education LetterNEW HORIZONS 4/18/2006 Education Letter

NEW HORIZONS 5/22/2006Education Letter and Voluntary Payment

$408.00 $0.00

NEW HORIZONS 6/29/2006Education Letter and Voluntary Payment

$84.00 $0.00

NEW HORIZONS 8/14/2006 Recoupment $36,587.12 $0.00NEW HORIZONS 2/8/2007 Recoupment $6,393.00 $0.00NEW HORIZONS 2/8/2007 Recoupment and AG Referral $3,192.00 $0.00

NEW HORIZONS 7/16/2007Recoupment, AG Referral and Education Letter

$24,663.00 $0.00

NEW HORIZONS 4/16/2008Recoupment, AG Referral, Education Letter, Internal Referral and Other Referral

$26,458.00 $0.00

NEW HORIZONS 4/16/2008Recoupment, AG Referral, Education Letter, Internal Referral and Other Referral

$37,141.50 $0.00

NEW HORIZONS 9/15/2008 Other ReferralNEW HORIZONS 9/23/2008 Other ReferralNEW HORIZONS 9/23/2008 Other Referral

NEW HORIZONS 7/13/2010Recoupment, Fine, and AG Referral

$1,511.00 $1,000.00

NEW HORIZONS 12/28/2010 Recoupment $1,691.74 $0.00    TOTAL $138,129.36 $1,000.00

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Objective 2: Detection and Objective 2: Detection and Recovery of Improper Payments Recovery of Improper Payments

• No programmatic monitoring of LTPCS providers

• No on-site financial monitoring of any providers

• Data mining efforts could be enhanced with hiring of individuals with expertise

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Detection and Recovery – Analysis Detection and Recovery – Analysis of Denied Claimsof Denied Claims

• Analysis of claims denied due to errors would help identify problem providers

– In one month, 38% of LTPCS claims had attempts to submit duplicate billings and 19% of claims included attempts to over bill the amount of services prior authorized

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Objective 3: Reduction of Costs in Objective 3: Reduction of Costs in LTPCS ProgramLTPCS Program

• Found approximately 1,000 recipients in LTPCS program who shared the same address

• Could save $3.5 million if one direct care worker cared for two people in the same home

Cost Savings of Using Shared Supports with LT-PCS

Number Residing at Same Address 1053

Current Total Per Week $353,808

Proposed Total Per Week $286,079

Savings Per Week $67,729

Savings Per Year $3,521,908

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Reduction of LTPCS CostsReduction of LTPCS Costs

• When service hours reduced, everyone urged to appeal hours; during appeal recipients get maximum service hours

• Appeals average 5 months; 64% of cases DHH won the appeal

• If DHH reduced length of time, they could save $284,000 for every month reduced

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Impact of ReportImpact of Report

• Identified a total of $5 million in either improper payments or cost savings.

• Agency agreed with all recommendations• Fraud auditors in our office issued a report based

on investigating direct care workers identified in this report

• All data on overlapping times was requested by Medicaid Fraud Control Unit (MFCU) for investigation

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Report Impact (continued)Report Impact (continued)

• Agency developing call-in system for direct care workers

• Agency developed rule requiring shared supports for the LTPCS program

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Report ImpactReport Impact1. Topic Selection – topic should be something the

public and agency care about2. Subject should have past issues or be at risk for

future problems3. Audit involves various data analyses with

quantifiable results4. Audit findings have the potential to save money or

generate more revenue

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Questions?Questions?

Contact InformationKaren LeBlanc

Louisiana Legislative [email protected]

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