Legislature(2013 - 2014)BUTROVICH 205
02/05/2014 01:30 PM Senate HEALTH & SOCIAL SERVICES
| Audio | Topic |
|---|---|
| Start | |
| Overview: Program Integrity and Fraud Control in the Medicaid and Public Assistance Programs | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
SENATE HEALTH AND SOCIAL SERVICES STANDING COMMITTEE
February 5, 2014
1:38 p.m.
MEMBERS PRESENT
Senator Bert Stedman, Chair
Senator Peter Micciche, Vice Chair
Senator Pete Kelly
Senator Johnny Ellis
MEMBERS ABSENT
Senator Kevin Meyer
COMMITTEE CALENDAR
OVERVIEW: PROGRAM INTEGRITY AND FRAUD CONTROL IN THE MEDICAID
AND PUBLIC ASSISTANCE PROGRAMS
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
WILLIAM STREUR, Commissioner
Department of Health and Social Services (DHSS)
Juneau, Alaska
POSITION STATEMENT: Presented information on "Program Integrity
and Fraud Control, Public Assistance & Medicaid."
ANDREW PETERSON, Assistant Attorney General & Director
Medical Fraud Control Unit
Department of Law (DOL)
Anchorage, Alaska
POSITION STATEMENT: Presented information on the "Alaska
Medicaid Fraud Control Unit (MFCU)."
ACTION NARRATIVE
1:38:49 PM
CHAIR BERT STEDMAN called the Senate Health and Social Services
Standing Committee meeting to order at 1:38 p.m. Present at the
call to order were Senators, Kelly, Ellis, and Chair Stedman.
Senator Micciche arrived shortly thereafter.
^OVERVIEW: PROGRAM INTEGRITY AND FRAUD CONTROL IN THE MEDICAID
AND PUBLIC ASSISTANCE PROGRAMS
OVERVIEW: PROGRAM INTEGRITY AND FRAUD CONTROL IN THE MEDICAID
AND PUBLIC ASSISTANCE PROGRAMS
1:39:21 PM
CHAIR STEDMAN announced that the only order of business would be
overviews entitled, "Program Integrity and Fraud Control in the
Medicaid and Public Assistance Program" and "Alaska Medicaid
Fraud Control Unit." He noted there would be no public testimony
today.
1:40:28 PM
WILLIAM STREUR, Commissioner, Department of Health and Social
Services (DHSS), Juneau, Alaska, presented information on
"Program Integrity and Fraud Control, Public Assistance &
Medicaid." He referred to the partnership between DHSS and the
Department of Law on this issue. He began with a statement that
"there are a lot of Alaskans in need." He noted DHSS's budget of
$2.66 billion this year and the need to spend wisely,
appropriately, and honestly in order to reach those in most need
of care. He said it was the right thing to do and the practical
thing to do. The department must ensure that the funding goes to
where it can have the greatest impact.
COMMISSIONER STREUR explained that recipient fraud is primarily
controlled through the Public Assistance Fraud Control Unit in
DHSS and through the Welfare Fraud Section, Office of Special
Prosecutions & Appeals in the Department of Law (DOL). Provider
fraud is controlled by the Medicaid Fraud Control Unit (MFCU).
He said Medicaid fraud is either recipient fraud or provider
fraud. The greatest financial impact of fraud is to the
provider. Recipient fraud involves a great deal of prevention.
The mission of Medicaid Program Integrity (MPI) is to preserve
and protect the integrity of the Medicaid program by proactively
developing strategies to identify, deter, and prevent fraud,
waste and abuse. There are seven staff in MPI who conduct
provider claim reviews, manage the audits, and coordinate
provider overpayment recovery and reporting. They also manage
the Recovery Audit Contract required by the Affordable Care Act.
He added that MPI is the liaison with DOL's MFCU.
COMMISSIONER STREUR remarked that MPI manages the audit contract
established under AS 47.05.200. In partnership with Myers &
Stauffer, LC, MPI does 70 audits a year.
1:44:08 PM
SENATOR MICCICHE asked if the audits are random on a net basis.
COMMISSIONER STREUR said they are random. He explained that MPI
randomly selects 65 audits and five are targeted. They address
several criteria; have they been audited recently and do they
have audit history.
He continued to explain about the MPI section, highlighting its
accomplishments. Last year MPI identified $6,235,000 in
overpayments, of which they recovered $4,962,000. They suspended
payment to 56 providers based on credible allegations of fraud.
He suggested the department is only beginning efforts in that
area.
He said MPI also re-procured the audit contract required by
state statute and issued 70 final provider audits conducted by
Myers & Stauffer, LC. MPI initiated the Recovery Audit Contract
required by the Affordable Care Act. He clarified that the
department contracts as a state, but goes through the federal
process to conduct the 142 audits. He opined that MPI should
work more closely with MFCU in this area due to the great
opportunity for recovery. He concluded that MPI participated in
four on-site investigations in collaboration with MFCU, the
Office of the Inspector General, and the FBI.
1:47:19 PM
COMMISSIONER STREUR discussed the Division of Public
Assistance's role in preventing fraud. Public Assistance Fraud
Control investigates allegations of applicant and recipient
fraud, collaborates with federal and state agencies, and works
on administrative sanctions and/or criminal prosecutions. The
Division has offices in Anchorage, Fairbanks, Wasilla, and
Kenai.
COMMISSIONER STREUR discussed the Division's role in data mining
- looking at databases for ineligible uses of aid programs. The
Alaska Corrections Offender Management System helps identify
felons illegally collecting benefits. The Division attempts to
maximize existing information systems to prevent fraud.
1:48:51 PM
COMMISSIONER STREUR highlighted Public Assistance Fraud Control
accomplishments in FY 13. He spoke of the $9,270,000 saved by
targeting cost avoidance, investigating fraud claims, and
providing direct savings. Identifying ineligible applicants
before payments are made makes up the largest part of the
savings. There was $1,680,008 saved in applicant fraud,
$6,455,987 saved in categorically ineligible investigations, and
$441,558 saved in recipient fraud. From 12 fraud convictions,
$198,475 in court-ordered restitution was recovered.
1:50:02 PM
ANDREW PETERSON, Assistant Attorney General, Director, Medical
Fraud Control Unit, Department of Law, Anchorage, Alaska,
presented information on the "Alaska Medicaid Fraud Control Unit
(MFCU)." He referred to the Omnibus Budget Reconciliation Act
of 1993. It requires states to establish MFCUs with performance
standards and guidelines and minimum personnel requirements. If
the standards are met, the Federal Financial Participation Grant
will fund 75 percent of MFCU operations.
1:52:17 PM
MR. PETERSON discussed the areas MFCU focuses on. It
investigates and prosecutes medical assistance fraud,
allegations of abuse or neglect, and financial exploitation or
misappropriation of patient assets. These areas are regulated by
federal grants and relate to agencies that receive Medicaid
dollars. Other areas of focus, separate from criminal
prosecution, are global recoveries through the National
Association of Medicaid Fraud Control Units, and civil suits by
the state.
He said MFCU also has limitations. It does not focus on non-
Medicaid cases, investigating or prosecuting recipient fraud, or
data mining. He explained that MFCU is part of the Department of
Law and falls under the Attorney General's Office, and it is
independent from the Department of Health and Social Services.
Another requirement for federal funding is that MFCU have an
assistant attorney general for prosecuting, a financial auditor
or CPA, and at least one chief investigator. He described the
unit members.
1:56:02 PM
MR. PETERSON reported on the funding for MFCU. The funding year
is in federal fiscal years. Funding increased from 2011 to 2012
due to the legislature's funding of three additional
investigators, totally 6 investigators plus an auditor. The
number of investigations decreased intentionally because of
collaboration with DHSS to improve the quality of the referrals.
Investigators no longer have to spend time screening cases. The
number of convictions has increased, beginning in 2013, from one
to nineteen. So far in 2014, there have been 25 convictions.
1:59:10 PM
MR. PETERSON shared Medicaid fraud statistics. The FBI Financial
Crimes Report from 2010 to 2011 estimates that between 3 percent
and 10 percent of total billings nationwide are fraudulent.
SENATOR MICCICHE asked about the statute of limitations on past
fraud cases.
MR. PETERSON explained that the statute of limitations is
generally 5 years; however, it can be up to 8 years for fraud
cases, but no more than one year past the date of discovery. He
explained that when he took over the unit, there were many old
cases, but the decision was to address the new ones. He used
home health care as an example of old cases that can be looked
at because the providers can be identified; Alaska is ahead of
the curve in this area.
2:02:39 PM
MR. PETERSON noted that fraud schemes are becoming more
sophisticated and tend to be carried out nationwide. Efficient
deterrence requires agency cooperation. The best way to deter
fraud is to collaborate with other agencies.
He described MFCU's collaboration with the Department of Health
and Social Services (DHSS). Through coordinated Medicaid
Division meetings, Program Integrity, Quality Assurance, Health
Care Services, Behavioral Health, and Department of Law, meet
together to identify cases of concern, problems, and
limitations.
2:05:28 PM
MR. PETERSON highlighted collaboration with other agencies such
as the Alaska State Troopers, Municipality of Anchorage & APD,
Office of Inspector General (OIG) Agents, FBI, Immigrations and
Customs Enforcement, other federal agencies like SSA, DEA, USPS,
and Departments of Labor, Commerce, and Corrections.
He discussed health care fraud referral sources: DHSS, online
website, private citizens, recipients, police, providers, and
other government agencies. MFCU screens referrals and
investigates them or refers them to other agencies.
2:08:16 PM
MR. PETERSON turned to Medicaid payment suspensions. There are a
total of 62 suspensions based on credible allegation of fraud
from 10/12 to the present. He described the process of payment
suspension. He gave examples of areas in which there have been
payment suspensions; a home health care agency, a transportation
service provider, two medical practices, and 58 individual home
health care attendants. The cost savings estimate is about $15
million.
CHAIR STEDMAN asked if that is a projection of loss over time.
MR. PETERSON understood that it was an estimate of future
savings.
He described prosecutions from October of 2012 to the present
where MFCU charged 72 criminal cases. Those cases focused in
areas such as personal health care attendants billing for
services not provided, double billing for time, travelling
internationally, and billing while recipient is hospitalized.
There were three cases against assisted living home employees
for endangering the welfare of a vulnerable adult, and fraud by
a doctor and an office manager.
2:12:45 PM
MR. PETERSON highlighted resolved cases. Between October 2012
and the present, there were 44 criminal convictions where the
individuals were suspended from providing Medicaid services and
had to provide restitution. Judgments totaling $226,931 were
secured. There were also two civil resolutions. There are a
number of pending cases and ongoing investigations. The
estimated potential recovery is between $1.3 million to $3
million if allegations are proven.
MR. PETERSON discussed notable cases. He described State v.
Batac where the defendant was employed by the Municipality of
Anchorage as a tax assessor and at Home Depot. The defendant
billed Medicaid for PCA services while working and traveling.
The total amount of fraud equaled $64,665.47 and she received a
felony conviction and was sentenced to one year in jail followed
by probation for 10 years. She has the option of paying back the
money for reduced probation.
2:15:29 PM
He said another case was State v. Gunes and involved an
Anchorage taxi driver convicted for fraudulently billing
Medicaid $100. He was accepting Medicaid vouchers for rides that
were prohibited and submitting false claims. Anchorage suspended
his chauffer license for five years and revoked his taxi permit.
He discussed an allegation for services not provided by the
Anchorage Transportation Company.
2:17:54 PM
He highlighted a personal care attendant (PCA) case where 29
defendants were charged on July 9, 2013. The case was jointly
investigated with $362,000 in fraudulent billing identified.
2:19:06 PM
MR. PETERSON talked about the value of cooperation between
agencies in order to efficiently utilize limited financial
resources and the expertise of many, as well to identify
weaknesses and solutions for improving the program. He indicated
that Alaska is quite innovative in regulating home health care
programs and for getting results due to a high level of agency
cooperation. The sentinel effect is a general deterrence because
it leads to a decrease in fraudulent billing and savings from
deterring fraud and/or suspending providers.
2:20:56 PM
CHAIR STEDMAN referred to the budget increment to the Department
of Law a few years ago. He commented on the positive results
from that funding.
SENATOR MICCICHE thanked Mr. Peterson for his hard work.
CHAIR STEDMAN thanked Commissioner Streur and commended the good
team effort.
2:22:54 PM
There being no further business to come before the committee,
Chair Stedman adjourned the Senate Health and Social Services
Standing Committee at 2:22.
| Document Name | Date/Time | Subjects |
|---|---|---|
| DPA Medicaid PI Fraud Control 020514.pdf |
SHSS 2/5/2014 1:30:00 PM |
Fraud Control Presentation |
| MFCU Presentation to Alaska State Legislature 2014 Final.pdf |
SHSS 2/5/2014 1:30:00 PM |
Fraud Control Presentation |
| Kanehailua Press Release 10-17-13.pdf |
SHSS 2/5/2014 1:30:00 PM |
Fraud Control Presentation |
| Press Release (Final) - MFCU Charges 7-9-13.pdf |
SHSS 2/5/2014 1:30:00 PM |
Fraud Control Presentation |
| Press Release Batac 1-27-14.pdf |
SHSS 2/5/2014 1:30:00 PM |
Fraud Control Presentation |
| State v Gunes Press Release.pdf |
SHSS 2/5/2014 1:30:00 PM |
Fraud Control Presentation |