New York Fraud, Waste and Abuse, Recovery and Detection Project

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New York Fraud, Waste and Abuse, Recovery and
Detection Project

• A Strategic Partnership to Increase Program
  Integrity

August 25, 2008
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Introductions

• James G. Sheehan, Medicaid Inspector General,
  State of New York
• William S. Fox, J.D., M.A., Vice President
  MAXIMUS
• Anne C. Chappuie, M.H.A., Vice President MAXIMUS
• David M. Paul, C.P.A., C.F.E, Director MAXIMUS

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Our Solution A Strategic Partnership

• Embraces a shared vision to generate significant
  taxpayer savings and reduce inaccurate billing
  practices
• Combines State program policy experts with
  leading industry specialists and cutting-edge
  technology to create customized algorithms and
  unearth significant overpayment recoveries
• Aligns incentives to successfully attain our
  vision and create the model Medicaid Integrity
  Program

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The New York State Medicaid Program

• 46 billion program
• New York State accounts for 7 of the U.S.
  population and accounts for nearly 14 of
  Medicaid funds nationwide
• Highest per capita Medicaid expenditure in the
  country
• Per capita New York Medicaid spending is 130
  more than the national average
• 10,000 per recipient

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Federal-State Health Reform Partnership
(F-SHRP) An Overview

• F-SHRP is a waiver program to reform and
  restructure the States healthcare system and to
  ultimately promote the efficient operation of
  that system.
• Under F-SHARP, CMS invests a total of 1.5
  billion over 5 years in reform initiatives.
• Federal funding is subject to conditions and
  milestones that must be met by the State by the
  end of the five year demonstration period.
• If the State does not meet the targets in any of
  the years, it will be required to pay the Federal
  government an amount stipulated in the waiver for
  that particular year.

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F-SHRP Conditions and Milestones
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The Inception of OMIG

• In 2004, The New York Times began addressing
  accounts of fraud through an analysis of data
  obtained under The Freedom of Information Law.
• The series of articles showed instances of fraud,
  waste and abuse activities of both health care
  providers and enrollees.
• In November 2006, the New York OMIG was created
  as a formal state agency to conduct and supervise
  activities to prevent, detect and investigate
  Medicaid fraud, waste and abuse

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OMIG Program Integrity Vision A Three-pronged
approach

• Compliance
• Audit and Review
• Data Analysis

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Compliance

• We want to make New York a program integrity
  model by working with health care providers on
  compliance programs, and working with our agency
  partners to assure that payment rules are clear,
  fair, and easy to identify.
• We want to help make New York the State that
  puts patients first by focusing on information,
  quality and patient outcomes in our work as well
  as compliance with payment rules, and by working
  with our agency partners to assure that Medicaid
  providers meet minimum standards, or cease to be
  paid for Medicaid services to our patients.

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Compliance Common Concerns
It may sound similar to existing guidance, but .
. .

• Is an ineffective, non-compliant compliance
  program a program?
• Should an effective compliance program have
  discovered matters identified by OMIG audit or
  investigation?
• Mandated compliance programs-is this a health
  care version of principles-based regulation
  (vs. rules-based regulation) now being advocated
  in financial sector
• Significant differences between traditional
  Sentencing Guidelines model and New York
  mandated model

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Compliance Components
Eight Elements of the Program

• Written policies and procedures
• Employee designated as compliance program
  head-must report periodically directly to
  governing body
• Training all staff on compliance
• Communication lines to compliance officer
  (anonymous and confidential reporting)
• Discipline for failure to report suspected
  problems
• Routine identification of compliance risk areas,
  including internal audit and appropriate external
  audit
• Response to compliance issues as they are raised
  correcting such problems promptly and thoroughly,
  and identifying and reporting compliance issues
  to DOH or the Office of Medicaid IG refunding
  overpayments
• Non-retaliation

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Compliance Professionally Recognized Standards
Payment Reform Measures (CMS, Private, NGO)
Public Reporting
Responsive To
State Licensing
Industry Initiatives (IHI)
Peer Review Organizations
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Compliance Functions in Meeting Professional
Standards

• Medical staff and leadership
• Enterprise Risk Management
• Peer review
• Mandatory reporting
• Utilization review/quality assurance
• Patient safety
• Quality improvement
• Compliance
• Counsel

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Compliance Quality and Enforcement
The Outcomes to Look for

• Senior level commitment on quality, discussion
  and best practices adoption
• Addressing the bottom 10-get better or get out
• Support for internal quality and reporting
  efforts
• Accurate information to patients, payers,
  regulators
• Better quality and patient outcomes
• Program Integrity-getting what we are paying for

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Audits and Recoveries

• Conducts audits and reviews of Medicaid providers
  to ensure compliance with program requirements,
  including quality of care, and to determine the
  amount of any overpayments made
• Numerous field audits for SFY 2008 09
• Key areas of focus include
• HMOs
• Skilled Nursing Facilities
• Hospitals
• Ambulatory Surgery Services
• Assisted Living Facilities
• Diagnostic and Treatment Centers
• Durable Medical Equipment
• Home Health/Personal Care Services
• MAXIMUS is an integral component of the SFY 2008
  09 workplan and is identifying significant new
  recovery opportunities

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MAXIMUS Helping Government Serve the People

• Premier government services provider for over 30
  years
• Over 5,500 employees in 280 offices nationwide
  and internationally
• Healthy financial condition NYSE traded
  company with strong balance sheet
• Serving over 4,000 U.S. government clients
• All 50 states, the District of Columbia, Puerto
  Rico, the Virgin Islands, Canada, Australia, and
  Israel
• Every major U.S. county and city
• Federal government agencies and departments
  including CMS

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MAXIMUS Experience

• MAXIMUS Offers a Wide Range of Health and Human
  Services Solutions

• Health and social services program integrity /
  fraud, waste abuse
• Medicaid, Medicare, Tri-Care, SCHIP, Child
  Welfare, Childcare
• Medicaid managed care/SCHIP outreach, eligibility
  determination, education and enrollment
• Independent medical review / appeals adjudication
• Prior service authorization / quality monitoring
  / peer review
• Payment Error Rate Measurement services
• Third Party Liability
• Health and Social Services Information Systems
  (MMIS, SACWIS)

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MAXIMUS NYFWARD Accomplishments
New York Fraud, Waste, and Abuse Recovery and
Detection (NY FWARD)
Start Date 2007 Program Approximately 46B
annually Service Area Entire State of New York

• In the State of New York, MAXIMUS is a strategic
  partner with the Office of Medicaid Inspector
  General (OMIG) to
• Identify opportunities to enhance existing fraud,
  waste, and abuse (FWA) activities
• Implement processes and procedures to mitigate
  FWA
• Assist in the identification of both provider and
  recipient Medicaid FWA
• Support recovery of associated overpayments
• To date, we have identified millions of dollars
  in questionable claims and are in the process of
  implementing recoveries

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MAXIMUS NYFWARD Accomplishments continued

• Evaluating current FWA activities, pre- and
  post-payment reviews, and technologies utilized
  through data mining and analysis
• Identifying new initiatives to detect and prevent
  improper payments
• Estimating possible savings, costs, and time
• Implementing new improvements and initiatives
  approved by the State and assisting New York in
  changing current processes in order to improve
  recoveries and cost avoidance

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MAXIMUS NYFWARD Accomplishments continued

• MAXIMUS conducted a six month top-to-bottom
  analysis focusing on two crucial aspects of
  OMIG's Medicaid FWA efforts
• Functionalities and operations of the OMIG and
  related Agencies
• FWA vulnerabilities in New York Medicaid
• MAXIMUS staff conducted interviews with over 125
  staff from the OMIG and related agencies to
  examine the functionality and operation of the
  OMIG
• Conducted detailed research into national fraud
  trends and vulnerabilities in the Medicaid system
  and analyzed them in relation to current New York
  State Medicaid policies, procedures, and
  regulations
• Staff members have extensive healthcare FWA,
  Medicaid, technology, project management, and
  operational expertise
• Certified Fraud Examiners, Medicaid policy
  experts, operational experts, technology experts,
  and a CPA, and former fraud prosecutor

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MAXIMUS NYFWARD Accomplishments continued

• Initiatives are identified by combining extensive
  healthcare FWA expertise with sophisticated data
  mining technology
• Reports categorize providers and flags
  (indicators of claims that violate a system rule)
  based on claim details
• Individual claims are examined at the provider
  and patient level
• Claim details are reviewed in relation to current
  Medicaid policies, procedures, and regulations to
  verify the validity of the flags
• Once providers are approved by the State, OMIG
  begins recovery of overpayments
• Data mining tools detect unusual patterns of
  billing and/or questionable claims paid to
  providers, which are then summarized into flag
  reports
• The MAXIMUS analyst team develops initiatives
  within flag categories including but not limited
  to

• Duplicate claims billed
• Mutually exclusive procedure codes billed
• Unbundled procedure codes
• Same procedure code billed

• Unusually high units of service billed
• Transportation service billed without any
  related medical visits

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MAXIMUS Accomplishments continued

• Analyzed 3 years of New York State Medicaid
  claims data totaling 1.4 billion claim lines
• Analyzed every claim utilizing our customized,
  comprehensive fraud filters, identifying and
  ranking fraud opportunities based on historical
  data
• Provider centric
• Patient centric
• Performed a comprehensive review and analysis of
  payment policies with OMIG to implement
  customized rules-based analysis

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MAXIMUS Accomplishments continued
Conducting detailed analysis of rate codes and
developed fraud detection logic for rate-code
based provider billing

• Unique payment practices create abundant
  opportunity for provider fraud
• Special procedure codes and state-generated
  codes all create challenges to fraud prevention
  and discovery

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MAXIMUS Accomplishments continued
The MAXIMUS team continues to analyze the data to
identify previously unknown fraud opportunities

• New opportunities are hidden within the vastness
  of the data
• The changing nature of fraud demands flexibility
  and creativity on the part of examiners
• Requires use of the most sophisticated data
  mining tools available in conjunction with
  continual refinement and fine tuning

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MAXIMUS Lessons Learned
Strategic alignment between MAXIMUS and the OMIG
is paramount to achieving project goals

• Define respective project goals
• Chart a common path to success encompassing
  respective goals
• Engender a collaborative environment

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MAXIMUS NYFWARD Approach
Challenges Encountered

• Data Integrity
• Budgets and Resources
• Creativity of Providers and Suppliers
• Belief That This Cant Happen in Our System

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MAXIMUS Program Integrity Solution
MAXIMUS End-to-End Program Integrity Solution
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Conclusion

• Through this collaborative approach to enhancing
  fraud, waste and abuse, recovery and detection
  efforts in the State of New York, both MAXIMUS
  and OMIG are strategically aligned to
  successfully attain our project goals and create
  a model Medicaid Integrity Program

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The Future of Program Integrity
Front Loading Program Integrity

• Prevention vs. Collection
• Education and Training
• Stakeholder Commitment
• Real Compliance
• Comprehensive Program Integrity Programs
• Push Data Mining to the front
• Integration of State, Federal and Provider Efforts

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The Future of Program Integrity continued

• Data analysis (by both providers and agency) will
  drive program integrity
• Never events, highly improbable events, and
  series of events
• Systems and controls at larger providers and
  MCOS-share prevention duties
• Still significant role for clinically supported
  audits and investigations

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Questions