January 8, 2015

Does it make sense to approve a doctor for Medicaid who has a record of fraudulent billing? It apparently didn’t bother the bureaucrats running our Medicaid program according to an audit of provider approval procedures.

Triangle Business Journal reported ”The North Carolina Medicaid program approved a provider with two convictions for felony possession of controlled substances and one whose license had been revoked for fraudulent billing.

Those were just two examples found in an audit highlighting the risk that the state’s Medicaid program is not adequately protected against fraud.

Health care providers must receive approval from the N.C. Department of Health and Human Services before billing for Medicaid patients, and the audit found that the departments Division of Medical Assistance did not run the appropriate checks to ensure that only qualified providers were seeing Medicaid patients.

“Consequently, there is an increased risk that unqualified providers could have been enrolled in the Medicaid program and allowed to serve Medicaid recipients and receive payment from the State,” according to the audit.”

The system is managed by Computer Sciences Corporation under the supervision of the N. C. Department of Health and Human Services. But how much supervision was there when providers weren’t adequately checked for fraud?

Triangle Business summarized the audit this way.

Deficiencies in the enrollment process increase the risk of unqualified providers participating in the Medicaid program;

  • Documentation to support higher risk provider applications is often not available or insufficient to support the application approval;

  • The Contractor’s enrollment review procedures do not provide reasonable assurance that only qualified providers are approved to participate in the N.C. Medicaid program;

  • The Contractor does not always have evidence to support that mandatory verification checks were completed;

  • Quality assurance reviews were not conducted or were ineffective;

  • Contract lacks adequate performance measures to hold the Contractor accountable for processing applications accurately and reliably

While the problems predate her tenure, Secretary Wos says the deficiencies are being corrected. However, the audit notes NCDHHS gave misleading responses like claiming the contractor performing checks could be penalized for failure.

Conservative reformers want to replace NCDHHS with an independent Medicaid management board. Failure to police fraud is a good reason.