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Noting that Medicaid costs for personal care services topped $12.7 billion last year, the Office of Inspector General (OIG) for the U.S. Department of Health and Human Services (HHS), in a report posted today on its website, says that fraud is a “growing concern,” with many state Medicaid fraud control units reporting an increase in the volume of fraud.

The OIG said the most commonly reported schemes involve conspiracies between PCS attendants and Medicaid beneficiaries in which claims were submitted for services that either were never provided or were not allowed under program rules. The most vulnerable to fraud schemes were those situations in which beneficiaries have decision-making authority over certain services and take direct responsibility for managing their services, especially those allowing beneficiaries significant control over the selection and payment of PCS attendants.

In its report to Marilyn Tavenner, acting administrator for the Centers for Medicare & Medicaid Services, Larry J. Goldberg, principal deputy inspector general, cites a number of other issues in addition to fraud that OIG uncovered in an investigation that began in 2006.

Among those issues cited in the report to Tavenner, the OIG found the following in need of safeguards to prevent fraud, waste, and abuse in the PCS segment but also in other home care benefits.

Improper Payments Linked to Lack of Compliance

The OIG discovered that PCS payments were improperly made because services provided were not in compliance with state requirements; were not supported by documentation; were provided when the beneficiaries were institutionalized and therefore reimbursed by Medicare or Medicaid; and were provided by PCS attendants who were not qualified by state requirements.

Inadequate Controls to Ensure Appropriate Payment and Quality of Care

The OIG noted that existing program safeguards intended to ensure medical necessity, patient safety, and quality and prevent improper payments were “often ineffective,” noting (among other issues) inadequate controls in the prior authorization processes, or a lack of prepayment controls, and what the agency described “problematic billing practices.”

Concerned about what the OIG found as “significant and persistent compliance, payment, and fraud vulnerabilities,” the OIG wrote that CMS needs to take a more active role with states to combat these issues. Specifically, noted the OIG, CMS should:

  1. More fully and effectively use authorities available under section 1102 and Title XIX of the Social Security Act to improve regulatory oversight and monitoring of Medicaid PCS programs.
  2. Issue guidance to states regarding adequate prepayment controls. For example, CMS should identify a list of needed controls, including the necessary claims edits to prevent inappropriate PCS payments during periods when beneficiaries are receiving institutional care. CMS should also offer design instructions to better ensure the operability of prepayment controls.
  3. Consider whether additional controls are needed to ensure that PCS are allowed under program rules and are provided.
  4. Take action to provide states with data suitable for identifying overpayments for PCS claims during periods when beneficiaries are receiving institutional care paid for by Medicare or Medicaid.
  5. Address recommendations contained in prior OIG reports that remain unimplemented.

Click to download the OIG Final Report

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Chuck Buck is publisher of RACmonitor.

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Chuck Buck

Chuck Buck is the publisher of RACmonitor and is the program host and executive producer of Monitor Monday.

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