In Medicaid shift, fraud referrals rise

Tuesday, July 15, 2014

In its first year of existence, the state's Office of the Medicaid Inspector General more than doubled the number of Medicaid fraud referrals sent to the state attorney general's office and has increased collection of money owed by health care providers by more than a third, officials with the office said Monday.

But the inspector general, Jay Shue, added that he has also faced a number of challenges in establishing the agency and taking over a staff of about 30 employees who previously worked in the state Department of Human Services' Program Integrity Unit.

"It's been an up and down process," Shue said.

Created on July 1, 2013, by Act 1499 of 2013, the inspector general's office investigates reports of fraud and abuse in the Medicaid program and recommends ways to reduce such problems.

The office took over audits previously handled by the Medicaid Program Integrity Unit.

In the fiscal year that ended June 30, the inspector general's office referred 15 cases of suspected fraud to the attorney general's Medicaid Fraud Control Unit, said Bart Dickinson, the chief legal counsel for the inspector general's office.

The previous year, the Medicaid Program Integrity Unit referred seven suspected fraud cases to the attorney general's office, Dickinson said.

According to a report from the Medicaid inspector general's office, the referrals in fiscal 2014 led to three arrests of Medicaid providers and three convictions.

Meanwhile, the amount recouped from providers who had been overpaid increased from $1,137,406 in fiscal 2013 to $1,558,903 during the last fiscal year, Dickinson said.

The number of audits or reviews performed fell from 556 in fiscal 2013 to 354 in fiscal 2014. Dickinson attributed that in part to staff vacancies and the transfer in October 2013 of some types of reviews from the inspector general's office to the Human Services Department.

"We had fewer audits, but I'm OK with that because I hope we did better, more thorough, more complete audits, and we also collected significantly more," Dickinson said.

The office is authorized to have up to 36 employees but doesn't have enough funding to fill all the positions, Shue said.

Dickinson said about 30 of the positions are currently filled. The office's annual budget is about $2.5 million, with $1.1 million coming from state revenue and $1.4 million coming from the federal government.

The state's total budget for Medicaid, which pays for health care for low-income people and the disabled, is about $6.4 billion this year, with $5 billion coming from the federal government and the rest coming from the state.

All the inspector general office's employees except Shue and Dickinson work from the Human Services Department's downtown Little Rock headquarters, where the Medicaid Program Integrity Unit had been housed.

On Aug. 1, the employees are scheduled to move into the Tower Building at 323 Center St., Shue said.

Shue and Dickinson are now working in office space at Pyramid Place, 221 W. Second St., while the space in the Tower Building is being renovated.

Shue said attorneys and other staff members with the Medicaid inspector general's office hold briefings before audits are conducted to make sure staff members are prepared and afterward to review the findings.

Dickinson also noted that he and Shue have a "strong working relationship with the attorney general's office."

Shue is the former chief of the attorney general's office Medicaid Fraud Control Unit, and Dickinson is the former head of the attorney general's Cybercrimes Unit.

Shue and Dickinson also listed as accomplishments establishing a website on Nov. 21 where members of the public can report cases of suspected fraud. The office also established a protocol for providers to report when they are overpaid.

Providers have made about a dozen such reports so far, Dickinson said.

Attorney General Dustin McDaniel said in a statement that the inspector general's office "has done impressive work, while at the same time battling the hurdles of creating an office and building an organization from nothing."

Amy Webb, a spokesman for the state Department of Human Services, said, "We appreciate Jay's efforts to further strengthen the Medicaid program, because it provides vital services to Arkansans, particularly children and those with disabilities.

"It's especially encouraging to hear that his office's education efforts have resulted in more self-reporting and self-disclosure."

Sen. David Sanders, R-Little Rock and sponsor of the law creating the office, said he has been pleased with the results so far.

"I think the numbers that I've seen reported out have been good, particularly when you consider that fact that what they've been doing is starting up a new operation," he said.

A Section on 07/15/2014