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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