Adam Searing: Okay. Hello, everyone. Welcome to the webinar, and we're gonna just wait another minute. I think I think a few people are still getting on. So wait just 1 min, and we'll get started.
Adam Searing: Just waiting one more minute. To get started, but it'll be we should be in getting started in very shortly.
Andy Schneider: Rob.
Adam Searing: Pull up
Adam Searing: alright. Well, we've waited. We've waited another minute, so I think we're gonna go ahead and get started.
Adam Searing: Hello, everyone! My name is Adam Searing. I'm an attorney on the faculty here at the Georgetown University Center for Children and families, and I want to welcome everyone to our 3rd actually, child Medicaid Policy Institute. Webinar. The Cmpi seeks to educate child health advocates, providers, other stakeholders and policymakers on the fundamentals of the Medicaid program and its importance for children, families.
Adam Searing: and other individuals.
Adam Searing: Major Medicaid cuts and changes being discussed in Congress mean, we've decided to throw open again our webinars doors today for the 3rd time to the public, and have this 3rd webinar of our new Institute be focused on giving folks a better understanding of the overused phrase in healthcare of waste, fraud and abuse, and the relationship of that phrase to the 2 trillion
Adam Searing: dollars plus of Medicaid cuts that are now being discussed in Congress before we get going on the webinar. I just want to acknowledge that today. And this morning there was this memo from the White House Office of management and budget that has caused enormous and concern and consternation across the United States.
Adam Searing: including for Medicaid programs. That is an attempt to stop funding for many Federal programs, many of which affect
Adam Searing: lower income and vulnerable individuals. I know that the White House has attempted some clarification and said that this memo that's saying we're going to pause. Funding doesn't affect Medicaid. But nevertheless, some States attorney generals have filed a lawsuit, and then others. There have been several lawsuits filed about this issue. We at Ccf have a statement about this issue on our website from our
Adam Searing: director, Joan Alker, that you can read, and hopefully, we will all get more clarity about this very troubling situation. So I just want to acknowledge that that's there. But today we're we're focusing on the waste fraud and abuse arguments and Medicaid cuts.
Adam Searing: So let me go over some basics about the Medicaid program, and then I'm going to turn our webinar over to 2 of our amazing experts on Medicaid here at Ccf. My friends and colleagues, Tricia Brooks and Andy Schneider. Then we'll have time for questions. Led by my associate here at the center for the Child Medicaid Policy Institute. Jade little. So jade. Can we have the 1st slide, please?
Adam Searing: I know you all know this, but I'm going to go over it anyway. Medicaid is the nation's largest health insurer health coverage and long-term care services for 72 million Americans, one in 5 of us almost States run Medicaid on a day-to-day basis. They pay about a 3rd of the cost. The Feds oversee the program, pay about 2 thirds of the cost
Adam Searing: total spending. And this last fiscal year over 900 billion dollars, not over 950 billion dollars. Actually, second slide
Adam Searing: Medicaid is is a huge fruit has lots of different roles that are critical to all of us in this country. So it covers about 40 to 50% of the births in our nation.
Adam Searing: 40% of the nation's children are covered
Adam Searing: fills in coverage gaps for for lower income medicare focus on Medicare for our elderly
Adam Searing: largest funder of long term care services. If you need care in a in a nursing home or or
Adam Searing: long-term care facility. Often Medicaid is paying the bill, and the largest funder of substance, abuse, and mental health treatment services. This is also a critical revenue stream, helping our safety. Net hospitals and clinics around the country provide the care that Americans need to stay healthy.
Adam Searing: And it's particularly important as reports that we've done recently here at Ccf show in our rural areas and small towns in the United States. Medicaid is just critical in supporting our rural hospitals. It's also vital to our State capacity to respond to economic downturns and epidemics next slide.
Adam Searing: Now, this is relevant to our discussion today about the safety waste, fraud and abuse in the program, but given its many roles, Medicaid is very, very complicated. It's
Adam Searing: administered by 50 States and DC. Plus Puerto Rico and the 4 Territories, and we have such a huge range of services that it's that it covers. Also, if you think about it, the delivery system it's not, you know. These are all individual hospitals, individual
Adam Searing: nursing facilities, individual institutional care facilities and individual doctors and nurses, healthcare practitioners who are all, you know, delivering these services at the State level to these millions of people who need care. And also, finally, there are hundreds of managed care organizations that also are part of this system. So it's a, it's a system with a lot of moving parts. Okay, next slide.
Adam Searing: and this is really gets to the heart of the matter. Is that right now in Washington
Adam Searing: our House Republican leadership there are report after report after report, talking about giant cuts in Federal Medicaid, spending in the range of 2.3 trillion with a T dollars or 27% cut of the program over the next 10 years.
Adam Searing: and if cuts of this magnitude are enacted in Medicaid, these cuts will not slow healthcare inflation or reduce the need for long-term care services or supports from a growing elderly population. I mean, people are getting older in the United States. They need more long-term care services our families can't do without. It's not like that need just disappears. If we make a cut of trillions of dollars in the Medicaid program
Adam Searing: and states just simply cannot manage cuts of this magnitude in Federal Medicaid spending by reducing waste, fraud and abuse. And really there's only some bad options that are left for States. If cuts of this magnitude occur, it's going to be doing something like raising taxes.
Adam Searing: cutting seriously, cutting Medicaid eligibility, leaving millions of Americans without decent health care or going into the other main program, that states fund which is K through 12 and
Adam Searing: higher. Ed, so it just is not. This is just not tenable. And to really get into the meat of this, I'm gonna turn the turn this webinar over to Andy and Tricia to let you know more about waste, fraud, and abuse. So go ahead, Andy.
Andy Schneider: Thank you, Adam, and thanks everybody for joining the webinar so
Andy Schneider: As as Adam's presentation makes clear, there are a lot of moving parts in Medicaid, and hundreds of thousands, if not millions, of encounters every day.
Andy Schneider: Between providers and beneficiaries
Andy Schneider: and suppliers. And so you can understand that there would be program vulnerabilities in a in a program that's complicated.
Andy Schneider: So there's more detail on what I'm about to go through in some blogs that are linked to at the end of our presentation here. And if you're looking for citations or more information, I'd refer you to those
Andy Schneider: the
Andy Schneider: I just want to go through some basic facts. And let's start with, there is fraud and waste and abuse in Medicaid.
Andy Schneider: and I wish that weren't true. But it is. It's also true for Medicare and other Federal health programs. True for commercial insurers. They're just bad actors out there running around, and if they can take advantage
Andy Schneider: of a program, they will do it.
Andy Schneider: There is also waste and inefficiency in Medicaid, and that's also the case. In other federal programs.
Andy Schneider: There aren't any reliable estimates
Andy Schneider: on the amount of fraud and waste and abuse in Medicaid. We'll come back to that in a little bit.
Andy Schneider: The one thing I want to make clear on, and you'll hear more about this when Tricia makes her presentation, is the rate of improper payments in Medicaid is not a rate of fraud. It is not a rate of waste, and it is not a rate of abuse.
Andy Schneider: And however much fraud and waste and abuse there is in Medicaid, and there is some, it's not remotely close to
Andy Schneider: cutting the program by 2.3 2 trillion dollars or 27% over the next 10 years. So next slide, please.
Andy Schneider: Okay, so let's start with some definitions from Cms about what?
Andy Schneider: How they view fraud, waste and abuse. Technically. So, fraud
Andy Schneider: is when someone knowingly deceives or conceals or misrepresents
Andy Schneider: in order to obtain money or property from any healthcare benefit program.
Andy Schneider: and the simple example of that is a provider bills Medicaid for a service that he or she didn't provide knows that they're doing it collects money from the program
Andy Schneider: for for a service they did that they didn't provide. That is plain vanilla fraud.
Andy Schneider: Waste Cms defines as overusing services
Andy Schneider: or other practices that directly or indirectly result in unnecessary costs to Medicaid, and we'll go into some examples of that
Andy Schneider: and then finally abuse. Cms. Defines, as when healthcare providers or suppliers perform actions
Andy Schneider: that result in unnecessary costs to a healthcare benefit program, and an example of that would be
Andy Schneider: a provider manipulating billing codes to code for a service that will provide more reimbursement, even if that doesn't necessarily reflect the
Andy Schneider: the condition that the patient is in. So we're going to focus this conversation on just fraud and waste. I just want you to know
Andy Schneider: there is a technical term for definition, for abuse out there as well. Next slide, please.
Andy Schneider: So some examples of fraud against Medicaid. I just picked 2 at random. These are from the annual report that the Department of Justice and the offices of Inspector General at Hhs put out each year. This one was published in December. It reflects the performance of the agencies in identifying and prosecuting
Andy Schneider: fraud and making recoveries during fiscal year 2023.
Andy Schneider: And
Andy Schneider: these are just 2 examples, one involving children, one involving frail, elderly. Just to give you a little feel for how bad things can get.
Andy Schneider: So the 1st one involves an owner of a
Andy Schneider: toxicology testing lab urine, toxicology testing lab, who also owned a mental health and substance abuse treatment program for
Andy Schneider: services to youth.
Andy Schneider: and in January of 2023, he was convicted of defrauding the North Carolina Medicaid program of over 11 million dollars.
Andy Schneider: and the way this worked was he was paying illegal kickbacks in exchange for urine samples from Medicaid beneficiaries, and these included kids who were eligible for at risk after school programs they were required to submit urine samples as a condition of their participation in those programs.
Andy Schneider: and then the specimens were provided to his company for medically unnecessary testing. It turned out to be quite lucrative and quite unnecessary, and quite fraudulent, and he was sentenced to 200 months in Federal prison
Andy Schneider: in September.
Andy Schneider: So
Andy Schneider: at the other end of the age spectrum. Here are some individuals who were involved in the operation of a nursing facility in Boston, Spa, New York, by the name of the Saratoga Center.
Andy Schneider: and in February of 2023 they agreed to pay over 7 million dollars to resolve allegations, that they violated civil fraud.
Andy Schneider: statutes by submitting false claims
Andy Schneider: to Medicaid for worthless services provided to the residents of the nursing homes, and it turned out over 4 year period before the facility closed.
Andy Schneider: The operators
Andy Schneider: didn't adequately staff the facility. As a result, the residents suffered medication errors, unnecessary falls developed pressure ulcers, and they were, as part of the settlement agreement excluded from participating in Federal healthcare programs.
Andy Schneider: So next slide, please.
Andy Schneider: So the a couple takeaways from those slides.
Andy Schneider: Fraud hurts, hurts beneficiaries. They either get unnecessary services, or they don't get the services they need
Andy Schneider: or they get really substandard care
Andy Schneider: and of course it diverts funds from their intended purposes, and pretty much it's despicable.
Andy Schneider: Most of this committed by some providers who were bad actors, as we've just seen and
Andy Schneider: the reason for that structurally is that Medicaid is a health insurer, and it pays providers. It doesn't pay beneficiaries. Money's going to the providers again. Most of them are legitimate, reputable playing by the rules, delivering good services, but not all of them. And similarly, there are some enrollees who are bad actors as well, and shouldn't be on the program.
Andy Schneider: but most of the fraud, most of the recoveries is a matter of provider behavior. Not enrollees.
Andy Schneider: The. If you look at at the data, of course it's hard to find. But one source of data is this report that I just referenced on the annual performance of Doj and Oig in the healthcare fraud and abuse control program.
Andy Schneider: And there's a long listing of the cases that that were brought in, the recoveries that were achieved.
Andy Schneider: And if you look at the list which are broken down by type of provider, and they involve fraud, not just against Medicaid, but also against Medicare and some other Federal health care programs.
Andy Schneider: you've got ambulance service providers, durable medical equipment suppliers, diagnostic labs, managed care organizations, nursing homes, pain clinics, pharmacies, physical therapists, physicians, substance use treatment, providers.
Andy Schneider: no beneficiaries in the list of those successful prosecutions and recoveries.
Andy Schneider: again, doesn't mean there weren't beneficiaries committing fraud, but the overwhelming amount of what is being identified and recovered against. Out there is committed by providers.
Andy Schneider: You'll get the same pattern in the report that the Oig compiles every year of the performance of the State Medicaid fraud control units. Its job is also, among other things, to identify and prosecute fraud and get recoveries.
Andy Schneider: and in fiscal year 23 of the recoveries of the convictions. Excuse me. Beneficiaries accounted for about 2%. And of the recoveries about 1 10th of 1%.
Andy Schneider: So you know the data points we have. They're not as as robust as we might want, but there's certainly no indication that that fraud is is committed in large amounts by beneficiaries, and there's every indication that fraud where it's committed is done largely by providers. Next slide, please.
Andy Schneider: Okay.
Andy Schneider: you know, waste run abuse in Medicaid is not a new phenomenon over time in the program structures have developed to try to address, identify, and reduce.
Andy Schneider: and protect the program, to reduce waste, fraud, and abuse and protect the program. So at the at the State level, we've got.
Andy Schneider: of course, the State Medicaid Agency, which is primary responsibility
Andy Schneider: for for protecting its program. But in the States that use managed care organizations to help administer the program and furnish services to enrollees. Those organizations have fraud, fighting and identifying responsibilities. There are State Medicaid fraud control units. In some States State auditors are active on the Medicaid front or State legislative oversight agencies and committees.
Andy Schneider: again, at the state level. There's going to be various arrangements, but it's not like nobody is paying attention. People are paying attention, and they're they're doing what they can.
Andy Schneider: Same at the Federal level. We've got Cms which has 2 centers, the center for Medicaid and Chip services and the center for program integrity that are focused on this. There's the office of Inspector General. That's part of Hhs. There's the Department of Justice and the FBI, which helps with its investigations. And there are the Department of Justice also handles civil fraud cases that may be brought to them by whistleblowers under the False Claims Act.
Andy Schneider: There's the general accounting the Government Accountability office. Excuse me, which also plays a role here. So there are
Andy Schneider: There are lots of checks at the Federal level.
Andy Schneider: As well.
Andy Schneider: Could they be doing more sure are they doing a lot? Yes, next slide.
Andy Schneider: So some examples of waste.
Andy Schneider: And this is this is a chronic and and complicated problem. There are
Andy Schneider: unnecessary emergency room visits where
Andy Schneider: the the beneficiaries who need who need care. They definitely need care and they're receiving services. But they don't necessarily need emergency room care
Andy Schneider: if they had access to primary care services if they knew how to use primary care services if the primary care services were adequate on and on.
Andy Schneider: If they didn't have housing, insecurity or food insecurity, then we could reduce the amount of unnecessary emergency room visits, and of course there's a whole series of interventions designed to address this problem, I think, with some success, but
Andy Schneider: we still have in in a lot of states, and and a problem of unnecessary emergency room visits
Andy Schneider: which I think would fairly be described as wasteful, and efforts are being made to continue to reduce it.
Andy Schneider: Then there's the problem of administrative expenses that states incur in running the program. And one example here is
Andy Schneider: outlined in a letter that was sent by the Senators from Georgia and Senator Wyden, the ranking minority member of this of the
Andy Schneider: so the Finance Committee.
Andy Schneider: they asked Gao to investigate excessive administrative spending by Georgia in its Section 1115 work reporting requirements, demonstration, and according to the letter, as of June 2024, Georgia had spent 40 million dollars on the demonstration, and over 80% of that was spent on administrative and consulting costs.
Andy Schneider: so we'll see where where that investigation investigation goes and how this all plays out. But that is one clear example of waste in Medicaid.
Andy Schneider: Next slide, please.
Andy Schneider: Again there are checks.
Andy Schneider: Senators write letter to Gao, and Gao goes and investigates.
Andy Schneider: Gao does its own reviews and investigations without being asked. The office of Inspector General, the
Andy Schneider: all the Federal agencies and State agencies that we reviewed in the previous slide. There's also a long set of recommendations from Gao to Cms and the Congress for reducing waste in Medicaid
Andy Schneider: for its part, Oig Hhs. A strategic plan which which outline
Andy Schneider: a lot of recommendations and and program improvements that can be made next slide.
Andy Schneider: So the estimates again, I wish we had more data. I wish we had a better sense of exactly how much fraud, how much waste, and how much abuse there is in the program. I have not seen any reliable estimates. If anybody out there has reliable estimates as opposed to gut check guesses, love to see them and love to take a look at the data
Andy Schneider: again, as you're about to hear. Improper payment rate is not an estimate of fraud. It's not an estimate of waste, and it's not an estimate of abuse.
Andy Schneider: One data point from the healthcare fraud and abuse control report for 2023 we discussed earlier Doj. And Hhs reported that the Federal share of Medicaid fraud recoveries. Of course any recoveries are split between the Federal Government and the States
Andy Schneider: in proportion to the State share of of
Andy Schneider: the particular State share of its of its spending and the Federal Government share of its spending total recoveries. For 2023 were 257 million
Andy Schneider: again, not remotely in the same universe as 10 year cuts of 2.3 trillion dollars
Andy Schneider: next slide, please.
Andy Schneider: So, as Adam pointed out, and as I think we just have to keep repeating. So you don't see any in those Gao recommendations in the oig recommendations or in the macpac recommendations.
Andy Schneider: That are cited in the blog. You're not going to see
Andy Schneider: recommendation to transfer 2.3 trillion dollars in cost from the Federal Government to the States.
Andy Schneider: and it's not going to do anything to reduce waste, fraud, and abuse. There's no way any State would be able to manage its way out of a cost shift of that magnitude by reducing waste, fraud, and abuse.
Andy Schneider: and depending on the details of the cost shift, and however the States respond.
Andy Schneider: it could undermine the current checks on fraud, waste, and abuse and Medicaid. That, of course, will depend on the details. But but there's no way a cost shift of this magnitude is going to help.
Andy Schneider: Okay, and I'll stop there. Tricia, you're on.
Tricia Brooks: Thank you, Andy, and we're going to repeat this several times. But despite the fact that Medicaid critics often equate fraud with improper payments, the Government accountability office points out that improper payments and fraud are 2 distinct concepts that are not interchangeable, but they are related
Tricia Brooks: here. You see the statutory definition of improper payments, while all fraudulent payments are considered improper, not all improper payments are due to fraud. Similarly, there are types of fraudulent activity that do not result in improper payments, such as non-financial fraud.
Tricia Brooks: Improper payments of Federal funds, including those that State and local governments administer, may include different types of erroneous payments. Some improper payments are fraud related, and some are not, and we'll get into the details of that in a moment. Next slide, please.
Tricia Brooks: But 1st some background on how improper payments in Medicaid are measured.
Tricia Brooks: In Medicaid. There is the payment error rate measurement program known as Perm. It's based on a review of a statistically valid sample of fee-for-service claims, managed care, capitation, rates, and eligibility determinations.
Tricia Brooks: Each year 1 3rd of the States are reviewed to identify the extent of improper payments and the root cause. Importantly, the Perm process results in State-specific corrective action plans or caps to reduce improper payments and caps become much more stringent. If the State has consecutive improper payment rates greater than 3%
Tricia Brooks: next slide, please.
Tricia Brooks: So what does perm measure
Tricia Brooks: fee-for-service claims are reviewed to ensure that they are properly documented, and that the service was medically necessary.
Tricia Brooks: But it's different for Mco. Capitation payments firm only checks to make sure that the correct capitation rate was paid for each member. It does not review actual payments to providers, which may also include improper payments
Tricia Brooks: on the eligibility side Perm confirms that the eligibility determination was accurate, based on the State's eligibility verification plan, however, it does not check for erroneous determinations that deny new applicants or result in disenrollment at renewal, or when a change is reported next slide, please.
Tricia Brooks: Now it's important to note that only 5% of payments were determined to be improper in Medicaid in 2024 meaning that the vast majority, 95% are proper. And when you drill down the data show that nearly 80% of that 5%. That's 4% of this
Tricia Brooks: was flagged for insufficient documentation, or they had some other technical error that did not indicate that it was an improper payment. But as a result, those payments get classified in that way. Next slide, please.
Tricia Brooks: Now Hhs emphasizes that an improper payment is any payment that does not meet statutory, regulatory, administrative, or other legally applicable requirements.
Tricia Brooks: It's not just that a payment should not have been made. In fact, the payment may indeed have been made for an eligible person who received an eligible service from an enrolled provider. But the eligibility is not documented, or the claim was coded incorrectly.
Tricia Brooks: Only a small portion of payments represent monetary loss. If the Enrollee was ineligible for the program or service, the provider was not enrolled or an overpayment was made.
Tricia Brooks: it's important to emphasize again that improper payment estimates are not broad estimates. Next slide, please.
Tricia Brooks: Now, in 2019, the Program Integrity Improvement Act actually added the new eligibility element to Perm. And improper payment estimates clearly illustrated that between Covid and the lack of clarity on proper documentation of eligibility, improper payment estimates were over 20% in 2020 and 2021.
Tricia Brooks: But you can see that in the last few years Cms. Has worked closely with States to bring the payment error rate down, which has now declined to just over 5% last year, next slide.
Tricia Brooks: and to some extent increased use of automation during the unwinding of the Covid related Medicaid, continuous enrollment, provision.
Tricia Brooks: or as well as significant oversight by Cms. During the unwinding to make sure that States understood and were complying with renewal requirements. All of these efforts helped to reduce manual errors, and while increasing the State's efficiency, and in the 14 months following the lifting of continuous enrollment in March of 23,
Tricia Brooks: the share of renewals that were conducted automatically by the State eligibility system or ex parte rates, as they're known, increased from about a quarter of monthly renewals due to over half
Tricia Brooks: better connections to data sources should also help with the accuracy of new application, eligibility, determinations next slide, please.
Tricia Brooks: It's also important to point out that the eligibility and enrollment rule, effective in June of last year included the 1st update to eligibility documentation requirements since 1986, almost 40 years ago. And think about
Tricia Brooks: that was well before the digital Age
Tricia Brooks: States need these regulations to further reduce the number of payment errors associated with insufficient documentation. Rescinding the rule which seems potentially to be on the chopping block will leave States without updated rules and guidance. They need to reduce improper payments in the future
Tricia Brooks: next slide, please.
Tricia Brooks: So in closing, I want to reinforce what Andy and Adam said, shifting Medicaid costs from the Federal Government will not reduce improper payments of fraud, waste and abuse.
Tricia Brooks: It will not boost program integrity efforts because those require administrative and audit resources. But here's what it will do. It will threaten health, insurance and access to care for millions of low income children, families and adults.
Tricia Brooks: people with disabilities and seniors needing nursing home services and other long-term services and supports.
Tricia Brooks: There is no doubt that significant cuts to Medicaid will negatively impact state budgets.
Tricia Brooks: Think about it. 56% of the Federal money to States is specifically for Medicaid
Tricia Brooks: and Medicaid cuts will also jeopardize the financial stability of safety net healthcare providers and the State's healthcare economy at large, but particularly in rural areas, and with that I'll turn it over to our colleague, Jade Little, who's going to moderate our Q. And A. And if you haven't done so already. Please insert your questions in the Q. And a. Thank you.
Jade Little: Thanks Adam Andy and Trisha for your presentations. And yeah, as Trisha said, please put any questions that you have in the Q. And a that's what we'll be pulling from for this part of the webinar. And with that the 1st question that we have goes back to Andy, your presentation on those examples of fraud. Amy is interested if you know how, in those 2 examples, how folks were caught, and maybe if you could elaborate a bit more on what Medicaid watchdogs exist.
Andy Schneider: Okay? Good question.
Andy Schneider: So I don't. I don't know in those 2 cases how the fraud was identified.
Andy Schneider: But there's an answer to that question and either the
Andy Schneider: the Doj people who work the case, usually a local Us. Attorney's office, or possibly the State agency.
Andy Schneider: Now that the fraud has been uncovered. We'll we'll know the answer, but I don't.
Andy Schneider: And then I'm not quite sure, on the second part of the question, what kind of information you need.
Andy Schneider: All I can say as a general matter is any. If you're thinking about on the State side.
Andy Schneider: You know which state agencies perform which roles with respect to identifying and investigating and prosecuting fraud, that
Andy Schneider: that will vary from state to state, and the amount of resources that the State puts into that function is also going to matter.
Andy Schneider: And at the Federal level, you know, we've got
Andy Schneider: some standing agencies, both in the executive branch and working for the for the Congress that
Andy Schneider: staff and missions to to identify and reduce fraud and abuse and waste against the program. But other than that, I can't. I can't speak specifically to your question.
Jade Little: Thanks, Andy. The next question we have is just generally, is there data on emergency room visit waste? Do we know if any of that exists.
Jade Little: You see Tricia, shaking her head.
Andy Schneider: Yeah. So so it definitely exists. Right?
Andy Schneider: There are some studies in the blog on the waste and abuse blog. I cited some that my research colleague, Obriana Osorio, was able to find. I'm sure there's more out there.
Andy Schneider: But is there like a a broad, systematic national database on this? No.
Jade Little: Thanks, Andy. Next question we have is going into Medicare advantage. I don't know if that'll be a little bit out of the scope of this, but it says Medicare, advantage is a private provider, and most of these companies are on the Stock Exchange. These entities are making record profits. When do profits become fraud?
Andy Schneider: Okay, appreciate. You want to do that.
Tricia Brooks: Well, that's a lovely question. I'm not sure that they will ever rise to the level of fraud, but there's certainly misappropriation of Federal dollars, and there should be oversight, and we've tried to move on those rules, and Andy can expound more on them in terms of the medical loss ratio.
Tricia Brooks: And what's appropriate administration. But that's certainly in Medicaid. But yeah, I mean, I think that there is a lot more that could be done.
Andy Schneider: Okay. So let me just put a little nuance on this, and I and I don't know anything about medicare advantage.
Andy Schneider: But on the Medicaid managed care organization, or Mco. Front.
Andy Schneider: When States contract with managed care organizations.
Andy Schneider: they are obligated to pay an actuarially sound rate, and that rate is developed by actuaries, and it is approved by Cms. If it meets the right criteria and part of the rate is an allowance for profit.
Andy Schneider: so it so if if an Mco. Is receiving that rate in from the State Medicaid Agency, and is delivering services.
Andy Schneider: according to the terms of the contract that it's entered into with the State agency. There's there's no fraud there.
Andy Schneider: There's a policy argument about whether States should be paying an allowance for profit.
Andy Schneider: That policy argument actually is unfolding now in several States, as we speak, but that's got nothing to do with fraud.
Jade Little: Thanks, Andy.
Jade Little: Next question we'll go to is, do we know how medicaid fraud, waste and abuse compares to private health insurance?
Andy Schneider: Well, I don't.
Andy Schneider: Maybe so.
Tricia Brooks: There is.
Tricia Brooks: Yeah, there's there's.
Andy Schneider: I don't even know how what the size of Medicaid waste for an abuse is right. I can't quantify that. I have absolutely no clue what's going on on the private side? I'm pretty sure there's some ways for an abuse out there, though.
Tricia Brooks: Well, there definitely is. And there are some groups that would suggest that it's actually higher in private insurance. Private insurance doesn't have the same checks and balances that Medicaid has in terms of investigating fraud and abuse, and, in fact.
Tricia Brooks: unfortunately managed. Care plans can pass on if there are fraudulent payments made within their risk pool. That risk pool is a certain amount, and they can pass on increased payments to cover those rather than going after the fraud. So I think there are lots of questions about the extent to which it
Tricia Brooks: is being tackled in private insurance, and there's a lot of work with anti-fraud coalitions on this front, that work with the FBI and other agencies on it.
Tricia Brooks: But at least the evidence I've seen in trying to compare the level of fraud and abuse in Medicaid Medicare with private insurance would suggest that it may be higher in private insurance, but it's definitely a problem there, just as it is in Medicaid and Medicare, but they don't have the program. Integrity checks and balances and laws on the books.
Jade Little: Thanks. Tricia.
Jade Little: This next question. From Michael, says our State auditor general issues reports that show a big numbers for recovery but doesn't show the size of the program. So it looks like lots of fraud. But the percent is really small. So they're asking if we can provide context to that in our data that might just be speaking more to our point of you know, fraud being comparatively small in the grand scheme of Medicaid budgets.
Andy Schneider: Yeah. So there are a lot of data problems generally. I don't know the specifics of of the question
Andy Schneider: or the or the state involved. But so recoveries are, reflect
Andy Schneider: what you're actually you, as a as a prosecuting agency, are actually get able to return to the Treasury
Andy Schneider: right from what you've been able to prove in court is a fraudulent transaction, and
Andy Schneider: there are a couple of unknowns there.
Andy Schneider: What weren't you able to prove? That was also fraud
Andy Schneider: right? How much of what you were able to prove were you able to recover?
Andy Schneider: And that's just the fraudulent transactions that you found out about. What about the ones that you haven't yet uncovered?
Andy Schneider: How large are they? So there's a lot that's just not known, and contacts would be great.
Andy Schneider: right? And one way to think about this is okay. Okay. So we have these recoveries and
Andy Schneider: and let's compare them to the amount of money that the State paid out
Andy Schneider: in that particular year that was, or years that was covered by the the frauds in question for which recoveries were achieved. That would be one way of looking at. But you're missing a lot of pieces in the puzzle is the problem, and I
Andy Schneider: I wish there were a way around it. I just don't see it.
Tricia Brooks: Yeah, there's there's no data that tracks back to say. In this year we investigated fraud that could have accounted for X number of dollars. And we recovered
Tricia Brooks: this percent of those. So we can't actually get a sense of how much was recovered in those original investigations in terms of percentages. And, as Andy points out, was it really fraud or not? And that's what we really need is, 1st of all, that breakdown. Was it fraud? Was it not fraud, and if it was fraud, how much of that did we recover? I think it's also important to point out that some of these
Tricia Brooks: providers do this for years. And if we can stop them in their tracks, then it does reduce that potential for them to continue to abuse the program.
Jade Little: Thanks, Andy and Tricia. The next question is asking, kind of about transparency in Medicaid is Medicaid required to show transparency in bills like private insurance.
Andy Schneider: I guess transparency in billing.
Andy Schneider: Well-being.
Andy Schneider: So
Andy Schneider: Billing gets gets, and Trisha help me out here. But Billing gets in included in what we call encounter data.
Andy Schneider: Right? A beneficiary, visited an encounter, visited a provider at such and such a day, received such and such a service. The provider billed such and such an amount.
Andy Schneider: Okay, that's all part of encounter data, and
Andy Schneider: that data is supposed to be collected and reported to.
Andy Schneider: Of course, the State, whether by an Mco. Or or by a fee for service provider, but also the State is supposed to provide that to the Federal Government, and it's in a database called T. Hyphen msis.
Andy Schneider: but and that that database is available to researchers.
Andy Schneider: But otherwise I'm not. I'm not quite sure.
Tricia Brooks: I will, I will add, if the questioner is asking, can I go and see my explanation of benefits? Which shows that the provider billed this amount, however, there was an insurance adjustment because of the negotiated rate between the Mco. And and the provider.
Tricia Brooks: How much was actually paid? What's my responsibility as an insured. I'm not aware that we see those kinds of explanation of benefits in in Medicaid. So if that's what the listener is, or the yeah, the questioner is asking.
Tricia Brooks: I would be surprised to learn that after 30 years in this business.
Jade Little: Thanks both. We have a couple of questions that are kind of getting to a similar point.
Jade Little: One person saying they had a discussion with Senator Cassidy of Louisiana, recently kind of talking about the importance of protecting Medicaid for children, and he immediately started talking about fraud. So what kind of talking points, you know, is the opposition getting about fraud, waste, and abuse in Medicaid? And what kind of talking points can we use to help refute those. And what kind of messaging can we use
Jade Little: for that.
Andy Schneider: Well.
Andy Schneider: there is fraud in Medicaid, in Louisiana and other States. There's waste in Medicaid, in Louisiana and other States.
Andy Schneider: and there's abuse in Medicaid
Andy Schneider: in Louisiana and other States, and there are agencies at the State and Federal level whose responsibility is to reduce those.
Andy Schneider: And if they're not doing a good enough job
Andy Schneider: they should be encouraged to do a better job.
Andy Schneider: But a massive cost shift to Louisiana and the other States.
Andy Schneider: like a 27% cut in its Medicaid payments over the next 10 years.
Andy Schneider: That's not going to reduce waste, fraud and abuse.
Andy Schneider: And it's not a justification for cutting the program.
Adam Searing: Can answer that a little bit is that we will be working on, you know, points like that to from Ccf to think about that issue. But I think Andy's point is a good is a general good one. Is that the magnitude of the cuts that
Adam Searing: are being talked about in Congress are, and and Trisha's point as well, are so far beyond any conceivable
Adam Searing: report out there of improper payments of fraud that they really have very little connection to the 2 subjects have very little connection to each other, and really the the main reason for these cuts being proposed. It's it's very open that there is a need to provide for these tax cuts for some of the wealthiest Americans. And you know the folks in Congress who want to.
Adam Searing: because then these tax breaks want to find a place to to pay for them so they can balance the budget. And that's the reason this is, and fraud and abuse is a red herring. In many ways we can all agree. We want to reduce fraud and abuse and waste and Medicaid. And let's
Adam Searing: you know, let's focus on that. Let's do more about it.
Andy Schneider: Yeah, part of doing more about it just quickly. Part of doing more about it is for Congress to do some oversight.
Andy Schneider: So last year the House energy and commerce held a hearing on
Andy Schneider: improving program integrity in Medicaid, the Medicaid and Chip payment and
Andy Schneider: Access commission. Macpac testified there laid out a whole set of recommendations about how to do that. That's the way this should work.
Tricia Brooks: I think it's important to point out that
Tricia Brooks: we're cutting Medicaid for all the fraud that's in the program. Fraud, waste and abuse. If you want to use all of the terms. It's a talking point
Tricia Brooks: that's meant to get us to another place, and let's not question whether it's accurate or not. And I think the evidence. If you, if you really dig into what goes on in Medicaid and Medicare program integrity efforts both at the Federal and the state level. You will see that there is a lot of work going into this. And there's yes, more
Tricia Brooks: could be. But again, there's just no way that
Tricia Brooks: 27% of every payment that goes out the door is fraudulent.
Tricia Brooks: you know. It's just it just doesn't. The math doesn't work. And and we know that ultimately the intent is to reduce you know the supports that the Federal Government provides to low income families in terms of food, childcare, health care
Tricia Brooks: and affordable housing in order to pay for tax cuts for the ultra wealthy and for very wealthy corporations. That's what happened in the 1st in Trump 1.0. And that's what they're trying to do to finish the job in 2.0 to make those tax cuts permanent, and we should not allow it to be on the backs of low income families.
Jade Little: Thanks. Tricia. Important point to be made.
Jade Little: I'll know we're getting a number of questions kind of about data that exists. We can try to include in our follow up resources, links, and other resources that you all can look at to try to answer those questions on data. But I'd like to go to a question. Nursing facilities, hide profits in related party contracts. The facility makes excessive payments to companies such as food.
Jade Little: service, etc, that are controlled by the same owners. Is this an example of Medicaid or Medicare fraud? And then they link to a consumer voice, report.
Tricia Brooks: It's gotta be medicaid because Medicare doesn't pay for nursing homes right.
Andy Schneider: Well, there is a post hospitalization benefit for a short period of time, so there are.
Tricia Brooks: Right.
Andy Schneider: Yeah.
Tricia Brooks: Rehab.
Andy Schneider: Their beneficiaries in skilled nursing facilities, who start with their coverage in Medicare, and then, if they're low income and dual of the eligible, medic, and they still need institutional care. Medicaid will pick that up. So
Andy Schneider: the the payment structures, like the reimbursement structures for nursing facility care
Andy Schneider: vary from state to state there are going to be allowances for various kinds of costs in those structures.
Andy Schneider: I am not by any means knowledgeable about what those look like
Andy Schneider: again, my my general view would be if the facility is
Andy Schneider: is meeting its obligations under its provider agreement with the state
Andy Schneider: which it has to enter into to receive coverage for to receive payment for serving Medicaid residents.
Andy Schneider: and if the if the rate that it's getting paid has been approved by by Cms, then.
Andy Schneider: if it's playing by the rules and the rate's been approved, I don't see. I don't see fraud
Andy Schneider: in that equation.
Tricia Brooks: I do think
Tricia Brooks: you know the area of nursing home care. It's important to point out that there's an institutional bias in Medicaid that really steers people into nursing homes.
Tricia Brooks: states in order to provide home and community-based services on long-term supports. They have to get a section 1115 waiver. They have to renew it every 5 years. They have to do all kinds of reporting on it. None of that is required for nursing homes, perhaps other than the rate review that Andy talked about.
Tricia Brooks: So the fact of it is is that
Tricia Brooks: is, nursing home care, and to some extent an abuse of Medicaid funding. One could look at it that way as opposed to being fraud, because many people in nursing homes can be served
Tricia Brooks: and be happier in their communities rather than put in an institution where in some cases they're not getting the best quality of care.
Jade Little: Thanks a good question for you, Tricia. Were there any indications that improper payments increased during the unwinding process.
Tricia Brooks: Well, not according to the chart that I showed, which indicated that improper payments, at least what is counted as an improper payment was reduced from 20 to 5% over the course of 4 or 5 years.
Tricia Brooks: And there are state level data on individual state improper rates. But if you remember the slide where I indicated that if the rate in consecutive years is more than 3%, the corrective action plans get more. Get more stringent. I think if we've got a 5% national rate.
Tricia Brooks: we probably got most states over that 3% threshold. And I really think that Cms and Hhs have demonstrated that they are focused on reducing this. I do want to reemphasize this issue with the eligibility and enrollment rule. It's kind of horrifying. And Andy's the one that told us this when the rule came out that the last time
Tricia Brooks: anything was added or changed on regulations regarding eligibility. Documentation 1986. For goodness sakes! No wonder States are getting it wrong, and Cms. Tried to correct, has tried to correct that with this rule, and if that rule is rescinded, it just sets back the clock on making additional gains.
Jade Little: Thanks. Tricia
Jade Little: Adam. Were there any questions I missed that you wanted to do otherwise? I'll let you wrap things up.
Adam Searing: All right. Well, I don't think there are, and I will just say I'll wrap things up. I'll start off by saying thank you to everybody for coming, and thank you to Jade Andy and Tricia for
Adam Searing: for speaking and and leading the webinar, and I know that both Andy and Tricia and Jay and myself, for that matter, are willing to answer any post Webinar questions you have. If you shoot us an email or speak to us on the phone. We're always happy to do that again. Let me just remind everybody that this webinar will be posted on our website, including the slides.
Adam Searing: We'll be up there, and we will have all the. We'll also post extra resources. I know. Tricia put some in the
Adam Searing: in her last slide, but we'll make sure we have a separate link with some more resources that people are asking for there. And so overall, I think the message is that yes, just like in the private healthcare insurance industry. There is waste, fraud and abuse in Medicaid, but it is a relatively small part of the program. There are a lot of agencies that are dedicated to trying to root out and find waste, fraud, and abuse.
Adam Searing: and eliminate it. We could spend more time and work harder, and should, on eliminating it. But in contrast to the huge cuts that are under consideration in Congress at the moment, the amount of waste, fraud, and abuse in Medicaid, which we all agree we should produce to the absolute minimum is relatively minuscule compared to the cuts that are out there.
Adam Searing: I want to thank everybody for coming, and we will look forward to seeing you on the next webinar that we have soon. So thank you.