Monday, August 01, 2005

Responses to "Ten Days That Did Not Shake the World."

These are the responses to my July 29 article on Medicaid fraud in New York State. Thanks to all, please continue to provide us with your feedback.

8 comments:

  1. I repeat my agreement with you and the media for attempting to eliminate billions of dollars in Medicaid fraud. As I wrote to you last month, the managed care plans need to be added to this list of providers who receive funds without having provided services to Medicaid recipients.

    The vast majority of healthy Medicaid recipients between birth and 64 years of age are required to enroll in a managed care plan. The plan receives a flat annual fee for each enrollee. The State does not audit to determine what services, if any, are provided to the individual. This is an open invitation to massive fraud, but the plans have a very strong lobby, so there's no requirement for the audits.

    It's my humble opinion that these plans have the potential for much greater abuse than the Department of Education's sloppy bookkeeping and the transportation services' boondoggles detailed in the NY Times articles. But the latter entities do not have the powerful GNYHA and Local 1199 supporting their endeavors.

    ReplyDelete
  2. As one who has witnessed the medicaid program in operation, I think you are
    generally on point in your observations.

    I for one, however, think that when the medicaid fraud review was
    transferred out of social services to DOH (Department of Health) back in
    1998, the legislature and governor responded to industry pressures without
    thinking through all the consequences. But this transfer took place in an
    environment in which the State sought to assign medicaid recipients to HMOs
    (see discussion below) which would have all the incentives to police their
    providers.

    DOH is institutionally geared to the delivery of quality health care. When
    a provider skirts appropriate standards or fails to supervise employees or
    fails to keep adequate records or fails to meet other lawful mandates, the
    approach of DOH is in part to educate, to compel change and future
    compliance and to make sure that the needs of the patients are being
    adequately serviced. This is as it should be. If DOH were to become too
    adversarial, patient care would ultimately suffer if too many sites were
    closed down or had to experience such administrative hardship that the
    normal business of the site is compromised. To ask DOH to be the agency
    that ferrets out fraud is difficult in view of the genuine commitment of
    many of the senior staff of DOH to the delivery of effective health care.
    And in light of the objective of placing medicaid enrollees into medicaid
    HMOs which would monitor fraud, the perceived need to be aggressive in this
    area began to wane.

    If I recollect properly, the legislation that transferred medicaid oversight
    from Social Services to DOH also transferred significant responsibilities to
    the Attorney General's Office. This particular Attorney General embarked on
    a crusade to punish major radio outlets for accepting monies to play Britney
    Spears' music by moulding State law into an avenue for the prosecution of
    what otherwise would be federal crimes (under poorly conceived federal
    legislation stemming from the payola "scandals" of the 1960s) and largely
    missed the boat on Medicaid fraud. It is not sufficient that the AG's
    office should be waiting for information from DOH. The AG, for example,
    could ask the Controller to conduct the kinds of audits that would allow the
    AG to ferret out criminal abuse.

    Having said all that, I find it difficult to accept your characterization
    that 10% of all medicaid dollars is wasted. There is no way to know whether
    this figure is low or high, particularly in light of the bifurcated
    responsibility for monitoring waste under the Medicaid HMO program. To the
    extent the State still services medicaid patients who are not enrolled in an
    HMO, the State should have maintained its monitoring ability.

    Medicaid "waste" takes place in many different forms:

    First, there is false billing for patient procedures where the patient never
    showed up. This is clearly criminal, and there have existed among actuarial
    firms computer programs for years which can profile medicaid payees (i.e.,
    physicians, dentists, hospitals, nursing homes, etc.) and red flag those
    whose practice exceed certain parameters. That no one at either DOH or the
    AG's office thought to do this -- SHAME!

    Then there is billing for procedures which represent an inflation of the
    services rendered. Medicaid providers use codes to describe the services
    provided. Some codes result in a high per procedure payment level than
    other codes. Where this is done routinely, this represents an easily
    detectible and correctible practice. The object should be to warn the
    practitioner upon a first offense, withhold monies from the practitioner to
    compensate for the overpayments previously made, and to put the
    practictioner on a short leash. Here again, there have been computer
    programs which many HMOs have used for years which can correct such abuses.

    Then there is the level where the doctor actually renders a service for a
    higher paying code than might be indicated by the patient's symptoms and
    writes chart to justify such higher degree of treatment. Here again,
    computer programs can profile physicians whose census for a particular type
    of diagnosis exceeds the general experience of HMOs, Medicare and other
    health care providers. This kind of abuse, if done in moderation, is
    harder to detect from computer programs, but is usually corrected as the
    result of a patient's complaint. But when the patient is not paying the
    bill, why would the patient complain?

    Now for a discussion on the role of medicaid HMOs In NY City, a good
    portion of medicaid is delivered by Prepaid Health Service Plans (i.e.,
    PHSP's or "medicaid HMOs"). There are only a limited number of medicaid HMOs
    authorized under NY law, and some HMOs have given up dealing with medicaid
    because they can't make money. The State reimburses the PHSPs based on a
    capitation rate per medicaid enrollee in the PHSP program. The PHSPs,
    therefore, have the primary responsibility for preventing waste and abuse,
    because their bottom line profits are affected. I suspect that non-profit
    PHSPs are not as careful in monitoring their providers as for profit PHSPs.
    But if the phsysicians who are being overpaid are billing multiple PHSPs,
    then each PHSP is making less profit -- the State is not losing money. (For
    example the State only reimbursed PHSPs for dental services at a rate which
    was less than $10 per month per enrollee when I was engaged in this work
    before 9/11 -- it is still much lower than the rate paid by non-medicaid
    HMOs.) Each PHSP is free to enter into its own reimbursement arrangements
    for the providers that service its patients.

    To the extent that the State overpays PHSPs because their payments for
    services create political pressures for the State to reimburse PHSPs at a
    higher rate, perhaps the taxpayers suffer. Perhaps better actuarial models
    concerning need for services need to be prepared. To the extent the State
    fails to assign people eligible for medicaid to PHSPs, then it must do its
    own monitoring, and here the AG must take the lead if DOH fails to deliver
    because it is institutionally not adept at such supervision.

    I have done legal work for PHSPs and am familiar with the kinds of
    monitoring that was performed as far back as 1998 when the responsiblity for
    medicaid supervision was transferred to DOH. It is more likely than not the
    rise of PHSPs and the reliance upon PHSPs to do their own monitoring that
    made it possible for DOH to cut its own enforcement personnel.

    PHSPs which monitor their providers can easily offset overcharges against
    future payments.

    My suspicion is that the problem is not as big as the news headlines lead
    one to believe. I have not kept current to know what percentage of medicaid
    beneficiaries are enrolled in PHSPs and what percentage is paid for directly
    by the State. This knowledge would be an important first step in figuring
    out how best to deal with the problem.

    Further, there is waste in any program. When you were Parks Commissioner,
    you had employees who overcharged the Department for reimburseable items,
    you had employees who shirked their responsibilities and probably caused
    attendance sheets to be fraudulently signed, and you had employees or
    contractors who did shoddy work, but you had to keep the parks going, and
    occasionally, when a good employee didn't perform, I'm sure you gave him or
    her a reprieve. And you relied on the controller's office to monitor your
    department's expenses as well.

    So there is clearly a problem with Medicaid. It should be corrected. And
    the AG's office has all the power it needs to monitor the situation. That
    the AG did not choose to do so and had other priorities suggests that Mr.
    Spitzer, like all other politicians, have both their good points and their
    weak points. That's life.

    ReplyDelete
  3. Anonymous10:01 AM

    If more than $17 billion a year is being stolen or wasted in the N.Y. Medicaid program (out of a total state budget of $160 billion), that's grounds for decisive, prompt official action. That it's not happening, other than the feeble finger-pointing and ineffectual symbolic measures that we've so far observed, is further, damning evidence of how dysfunctional N.Y. state government has become.

    The N.Y. Times gets enormous credit for breaking the underlying story, but no credit for follow-up. In a “normal” state, officials would move promptly and decisively to fix the problem, but not in N.Y. The N.Y. Times seems to believe that reporting the underlying story is enough. Not in N.Y. Not even when it’s the Times. That’s a story in and of itself, and so far, you’ve done the best job at follow up. Excelsior!

    Serious public officials would move decisively to stop the hemorrhage immediately with a freeze in disbursements until a short-term solution could be devised. If he had authority to do so, Spitzer, for example, could go into court to put the program into receivership. That’s not happening, which means that either they’re structurally unable to do so, or they lack the political will to do so. Bluntly stated, Spitzer can bring private corporations to their knees, but in the matter of Medicaid fraud in state government, he’s helpless to act? Does anyone believe this? Does the word “indictments” ring any bells? How about “civil actions”?

    As you’ve astutely noted, certain interest groups profit from lax oversight of Medicaid. Who in our political constellation has the guts to cross them? Pataki’s part-time lawyer, no matter how honest and diligent, can’t do the job by himself. And where is his Health Commissioner in this crisis? At home hiding under her bed? Has anyone demanded her resignation yet? Question to the Governor: She shouldn’t be held accountable because . . .???

    Questions for Bruno and Silver: Emergency action shouldn’t occur because . . .? No one should be held accountable because . . .?

    Although I am leery of the trial lawyers, Spitzer’s plea for a state False Claims Act, analogous to the federal statute, http://www.taf.org/ and http://www.blowthewhistle.com/falseclaimsact/history2.html is the best answer to your valid point about the economic interests being aligned on the wrong side of this issue. The opportunity to collect rewards based upon the magnitude of the frauds committed against the state creates a huge economic incentive for whistleblowers (informants with information about Medicaid fraud) to turn in the wrongdoers for the bounty. If the statute is structured correctly, the whistleblowers get the bulk of the money, not the lawyers.

    The status quo is unacceptable. If a N.Y. Times expose can't shame these people, what can? They already are disgraced, yet they seem oblivious to their own folly. "Whom the gods would destroy, they first make mad." Our entire polity here in N.Y. seems headed for the looney bin.

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