Medicaid Claims And Healthcare Waste: While The Data Flows, New Cracks Surface

With the heightened attention that commentators and government administrators have paid to the need for precise claims data in federal health care systems, one might have hoped that presently, approximately 2 years later, the issues would be tended to and the federal government's data rendered more dependable. Unfortunately, while improvements may well have been made, gaps in the programs continuously surface. Merely a couple of weeks ago, the Department of Health and Human Service's Office of the Inspector General ("HHS-OIG") published a report concerning flaws in the "Medicaid Interstate Match" program, which is aimed to minimize improper Medicaid payments by identifying beneficiaries that are registered in the Medicaid programs of more than one state. Despite the fact that the document does not directly suggest that issues in the Medicaid Interstate Match program are going to consequently impair fraud investigations or even result in the targeting of innocent Medicaid participants, it nevertheless again draws attention to the fundamental problems that exist in depending on data mining in the federal government health care system.

As the report from the HHS-OIG specifies, the Medicaid Interstate Match belongs to a more comprehensive data gathering program (the so-called "Public Assistant Reporting Information System," or "PARIS") that makes use of Medicaid enrollment records so as to determine if the very same person is acquiring government health care benefits from more than a single source or from more than just one state. The Medicaid Interstate Match in particular can identify cases in which patients continue to be enrolled in a given state's Medicaid program in spite of the fact that they have relocated to a different state and are receiving benefits from that second state's Medicaid program. Despite the fact that a person's receipt of money from more than one state's Medicaid program frequently results from a failure to promptly report a change of address, as opposed to from an intent to defraud, the program could nonetheless spare the Medicaid program significant amounts of funds that recipients are not eligibled to receive. Consequently, as of October 1, 2009, the Social Security Act mandated every state to participate in the Medicaid Interstate Match, and the Centers for Medicare and Medicaid Services ("CMS") oversees the issuing guidance involving such involvement.

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Nevertheless, as the HHS-OIG uncovered in its report, the engagement of the various states in the Medicaid Interstate Match program is considerably limited. Indeed, of the 4 measures that HHS-OIG has identified as constituting "participation" in the Medicaid Interstate Match (notably, CMS has not on its own previously described the term "participation," even though such participation is a pre-requisite with regard to securing federal funding), some of these measures in fact are not taken. As an example, while state involvement in the Medicaid Interstate Match requires that a state submit its enrollment data so that records can be matched with that from all other states, HHS-OIG determined that, for a sample 3 month period (the Medicaid Interstate Match administered on a quarterly basis), fourteen states did not provide Medicaid enrollment files for each of their enrollees, and with regard to those 14 states, on average merely 46 percent of the relevant data was supplied. As another illustration, in order for the Medicaid Interstate Match program to perform a significant role in discovering improper benefits payments, information that seems to signify a match among beneficiaries in more than just one state must be validated, in order to substantiate that there is not a "false positive." Nevertheless, the HHS-OIG report established that the states did not verify almost 70 percent of the matches that were identified, in part because the enrollment information submitted by the states was incomplete. Because of these and other problems, the HHS-OIG report reveals that for the three-month time frame under examination, not a sole improper Medicaid payment was recuperated by means of the use of the Medicaid Interstate Match.

Exactly what is one to make of HHS-OIG's document relating to the failings of the Medicaid Interstate Match? Initially, there is the somewhat anti-climactic or even clear determination reached by HHS-OIG, which is that "CMS should issue guidance to states on the requirement for participating in the Medicaid Interstate Match." Wisely, perhaps, CMS "concurred" with this guidance.

More vital, though, are a couple of observations which could be of particular relevance to those who practice in the healthcare fraud sector. First and foremost, HHS-OIG details in its document that, according to CMS, "5.8% of all Medicaid payments made in fiscal year 2013 were improper, representing $14.4 billion in Federal expenditures." The federal government frequently specifies such substantial numbers as evidence of widespread fraud, waste, and abuse that supposedly exists in federal government healthcare programs. Yet in point of fact, the HHS-OIG report offers some much needed context, indicating that 57% of the "improper" Medicaid payments come from more prosaic, mundane issues, like the "eligibility errors" that arise when a person moves from one state to another and doesn't supply Medicaid with a change of address. Fraud in the Medicaid program may still be a dramatic problem, but when "improper payments" are the outcome of these kinds of "eligibility errors" instead of fraud, the true extent of the challenge can better be recognized.

Second, despite the fact that the Medicaid Interstate Match is meant to detect eligibility mistakes rather than fraud, the defects in the gathering and utilization of Medicaid records continue to reinforce significant concerns. As this blog has noted, dependence on unreliable data and flawed methodology can lead to innocent participants in the healthcare system being exposed to expensive, lengthy, and potentially crippling audits and investigations. Additionally, while initiatives to correct data inaccuracies and address issues in program implementation might sometimes have a beneficial effect, systemic problems relating to the overall size of the Medicare and Medicaid programs, the nature of the bureaucracies which surround them, as well as the challenge of coordinating federal-state interactions in such a complicated area might render it impossible for healthcare data mining to ever be a fully reliable source of investigative decisions. For the regulatory authorities, auditors, investigators, and prosecutors who rely upon government data when determining whether or not to bring their power to bear on individuals who are the subjects of costly and burdensome health-care investigations, every one of these issues must carefully be weighed in the mix.

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