Medicaid Fraud Unit Grows With Program
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10 responses to “Medicaid Fraud Unit Grows With Program”
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I use a loaded cost of $200,000 per person per year for US based skilled employees. This covers everything – salary, direct benefits, pension contributions (at a fully funded level), office space, vehicles, etc. So, a 100 person operation costs about $20m per year. Looking at the last three years … that’s just under what is recovered. If you used a loaded cost of $100,000 per year the group would bring in about $10m beyond their costs.
All I heard from Republicans during the preamble of the Medicaid expansion debate was the huge level of waste and fraud in Virginia’s Medicaid system. So, an average of $22m per year in recoveries (over the last 3 years) seems to contradict that. It seems to me that:
1) There isn’t all that much waste and fraud
2) The waste and fraud is there but not being detected
3) The fines and penalties are too low relative to the fraud -
I, for one, applaud the AG’s office for aggressively policing Medicaid payments. As Don points out above, however, it does not make sense to spend more on policing the payments than is recovered in revenue. I also agree with Don that it doesn’t look like there’s much fraud and waste in Virginia. But that could be a function of the fact that potential scammers know that the system is being aggressively policed and, therefore, are deterred from engaging in illicit activity.
It would be interesting to compare Virginia’s expenditures and recoveries with those of other states. Is Medicaid fraud more extensive in other states? If so, is aggressive enforcement of the rules correlated with lower rates of fraud?
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There is this, if your eyes can decipher it. It uses a different 2017 total for Virginia but it might be the federal FY or some other period that doesn’t line up.
Looking over the report I was surprised how many faces and names I still recognized. I suspect that there is a point of diminishing returns on the enforcement activity and it is possible Virginia has found it. As I reported the MFCU staff now is lots more people than just auditors and lawyers.
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Good report. In Virginia, the recoveries are something like 1/3 of 1% of the total spend (if I am reading the report correctly). While Medicaid fraud should be policed that’s not enough fraud to even be a consideration in Medicaid expansion. What happened to the conservative argument that the Medicaid system was rife with fraud and should be restructured before being expanded?
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Active enforcement also causes others to reconsider whether they might well be caught if they engage in the illegal conduct. So, while there needs to be ongoing cost-benefit analysis of the enforcement effort, we do get some benefit from the deterrent effect of stepped-up enforcement.
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that’s an interesting point. For instance, has anyone done a cost-benefit ratio for the money spend by police to catch speeders and other miscreants?
How about all those body cameras? Do they pay for themselves?
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Well, on one hand, we keep hearing that Medicaid reimbursements are too low to pay providers actual expenses then on the other hand , this:
” None of the money comes from state taxpayers, but as is often noted we are all federal taxpayers as well. Its recoveries exceed its cost. ”
Maybe I’m dense but can Steve address that? where is that “excess” money coming from if not taxpayers?
Fraud in Medicare is a much bigger deal… and maybe comparing those two might also be interesting.
Mr. Haner continues to contribute impressively on issues and has become a substantial asset to the blog. thank you – again.
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DJ, actual fraud is one problem and inefficient or even foolish use of dollars is another. The problems with our healthcare system go well beyond Medicaid, of course, but there remain opportunity for process improvement, which never ends. I never felt it was unreasonable to demand that as a precondition to expansion – and was key to the discussion when it almost passed years ago.
Larry, perhaps I was clumsy. The MFCU operation for most years has collected reimbursements or financial penalties that exceed that year’s operation costs. (One year it didn’t was during our team’s term – had forgotten that.) It is mainly taxpayer money that was paid out and then gets paid back, although there can also be fines. Some of those are retained to operate the program, but most dollars go back to the federal or state treasury.
The MFCU office and its counterparts around the US are mainly funded directly by federal funds. It is not a General Fund operation (state tax dollars) but it is another example how it is the Non-General Fund side of the state budget which is exploding.
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I hear you. However, the group in the company where I work makes a lot of anti-fraud software for banks. Our software doesn’t make value judgements so I hold a pretty tight definition of “fraud”. By my definition, fraud has to be the commission of an illegal act. I also think there is “legal fraud”. For example, where a kind hearted judge or administrator uses Social Security disability payments as an extended form of welfare. I am equally sure there is a fair amount of waste because, after all, it is run by the government. However, anybody who claims some system has large scale fraud needs to back up that claim or withdraw it. Based on what I’ve seen the claim of large scale fraud in Virginia’s Medicaid system should be withdrawn. Now, legal fraud, waste and inefficiency are different matters altogether.
One question is whether enforcement is entirely directed at providers. It seems to me that a lot of people earn income “off the books” and might well qualify for expanded Medicaid payments based on their official income but not qualify on their total income including the off the books earnings.
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re: ” actual fraud is one problem and inefficient or even foolish use of dollars is another. The problems with our healthcare system go well beyond Medicaid, of course, but there remain opportunity for process improvement, which never ends. ”
That being said – Medicare has basically led the way in fighting fraud as well as cost containment where they set reimbursement benchmarks that others – including the private sector also use.
But again – MedicAid and Medicare both are accused of not reimbursing at a reasonable rate and yet we also ding them for their efforts to combat/rebut fraud. If the Medicaid funds come from the Feds for the expansion -those are earmarked taxes not general revenue taxes. Earmarked taxes generally cannot exceed what they take in… That actually engenders a feedback mechanism that seeks to combat fraud and cut reimbursements BEFORE they ask for tax increases! Right now – SS and HI are actively exploring options to balance FICA revenues with SS/HI/DI payouts and one of the options is to reduce benefits rather than increase the FICA tax itself.
To me, that’s a far more structured budget process than the items we see on the General Revenue side which are almost always – how much “more” can we give to K-12 teachers or Higher Ed or Public Safety AND original MedicAid which is very much funded from General Revenues not earmarked taxes.
In the end – cost containment is the name of the game for healthcare. Some call it “rationing”… but every country and every private sector insurance practice it because they must – and should.
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