Insurers Fall Short In Catching And Reporting Medicaid Fraud, Inspectors Find

Source: Chad Terhune, Kaiser Health News, July 12, 2018

Despite receiving billions of dollars in taxpayer money, Medicaid insurers are lax in ferreting out fraud and neglect to tell states about unscrupulous medical providers, according to a federal report released Thursday. The U.S. Health and Human Services’ inspector general’s office said a third of the health plans it examined had referred fewer than 10 cases each of suspected fraud or abuse to state Medicaid officials in 2015 for further investigation. Two insurers in the program, which serves low-income Americans, didn’t identify a single case all year, the report found. Some health plans terminated providers from their networks for fraud but didn’t inform the state. The inspectors said that could allow those doctors or providers to defraud other Medicaid insurers or other government programs in the same state. In addition, some insurance companies failed to recover millions of dollars in overpayments made to doctors, home health agencies or other providers. The inspector general said insurers stood to benefit financially from this because higher costs can justify increased Medicaid rates in the future. (The report didn’t name specific insurers or states.) …

…Health insurers serve about 55 million Medicaid patients across 38 states, and play an increasingly vital role in running the giant public insurance program. … One in 5 Americans is on Medicaid and enrollment is poised to rise even further as more states consider expansion under the Affordable Care Act. About 75 percent of Medicaid patients are part of a privatized system in which managed-care companies are paid fixed fees per patient to coordinate their care. Big, publicly traded companies such as UnitedHealth, Anthem and Centene dominate the business. In some states like California, evidence shows the funding often flows to the plans with little oversight, sometimes regardless of their performance. These companies tout their expertise at spotting suspicious billing patterns and chasing down criminals using sophisticated data mining, but the inspector general found that their fraud-fighting results don’t always match the rhetoric. …

Read full report.