Medicaid Overpayments: Prevention, Identification, Calculation and Recovery

1
Medicaid Overpayments Prevention,
Identification, Calculation and Recovery

• Vicki Jessup John Haine
• DHFS/DHCF/BEM

2
Presentation Overview

• Presentation Focus and Style
• Medicaid Policy and Process from recent
• past to present Facts and Fiction
• Medicaid Error Prevention Identification
  Methods
• Medicaid Overpayments Savings
• Overpayment Calculation Methods Examples
• Future savings estimation Methods Examples
• Increasing collections- present and future
• Estimates of recoverable Medicaid overpayments
  and agency incentives

3
Medicaid Policy Process Recent Past

• Program Simplification Streamlined
  Verification - July 2001
• Introduction of mail-in application option
• Mandatory verification, self declaration and
  questionable information
• New CARES verification codes and functionality
  (?, Q?, NV, QV)
• DHFS assumed reliance on available data exchange
  queries

4
Medicaid Policy Process Fact and Fiction

• Program Simplification Streamlined
  Verification - July 2001- continued
• If blank, assume no or zero
• There isnt any Medicaid QC
• Dont do any FEV for Medicaid
• Dont worry about overpayments

5
Medicaid Policy Process Present

• The right benefits to the right people at the
  right time. - Helene Nelson, DHFS Secretary
• DHFS/DHCF/Bureau of Eligibility Management Goals
• Increased program participation (ALL eligible
  persons)
• Customer Service
• Payment Accuracy
• Reduced workload for local agencies

6
Medicaid Policy and Process Present

• Questionable Re-defined and Re-emphasized
• in April 2006 (Ops 06-13)
• Income verification is required unless the
  information is currently available to eligibility
  workers through a source of data exchange.
• Medicaid verification policy flow chart
• Access Wisconsin
• Apply for Benefits (AFB)
• Report My Changes
• Check my Benefits

7
Medicaid Policy and Process Present

• It is a DHFS expectation that IM agencies will
• Effectively and efficiently obtain all
  information and/or verification that is necessary
  to accurately determine eligibility.
• Review eligibility budgets and apply program
  knowledge prior to confirmation.
• When warranted by case circumstances, refer
  Medicaid applicants or recipients for FEV or
  fraud investigation.
• When a recoverable overpayment is identified,
  calculate the amount and establish a recovery
  claim.

8
Error Prevention is key!

• Medicaid Eligibility errors result in a
  significant amount of misspent funds!
• Medicaid errors primarily attributed to a local
  agency and/or the CARES/MMIS systems are never
  recoverable.
• Recoverable, client-caused Medicaid
  overpayments present a major hardship for
  low-income recipients.
• Currently, overpayment determinations and
  calculations are complex and labor intensive.
• On average, even with tax intercept, collection
  of Medicaid overpayment claims occurs at a rate
  of 15 annually.

9
Methods to Prevent and Identify Medicaid
Eligibility and Cost Sharing Errors

• Medicaid eligibility and cost sharing errors can
  be prevented and identified with the effective
  use of
• Data exchange resources
• Error prone profiling
• Critical thinking and interviewing skills
• Case reviews and effective documentation
• Recipient education

10
Medicaid Error Prevention and Identification
Data Exchange

• Data exchange is a highly effective, reliable
  and underutilized means to identify recoverable
  Medicaid errors that are caused by recipient
  failure to
• Accurately report information at application or
  eligibility review and/or
• Timely or accurately report changes in
  circumstance that impact a recipients
  eligibility or cost sharing amount.

11
Medicaid Error Prevention and Identification
Data Exchange

• To prevent and identify Medicaid eligibility
  errors to
• the fullest extent, it is necessary to
  effectively utilize all
• available data exchange information, including
• State wage match
• State new hire
• Child Support Agencies
• State Online Query (SOLQ)
• Unemployment compensation
• Interstate UC Report (EOS CD70)
• BENDEX conflict alert (and EOS CD71)

12
Medicaid Error Prevention and Identification
Error Prone Profiling

• It is DHFS expectation that local agencies will
  routinely evaluate error-prone profiles and
  update as
• Agency conditions change.
• Profiles do not effectively generate referrals
• A new and primary error condition has been
  identified (with consideration for new
  application, review and change reporting
  methods).

13
Medicaid Error Prevention and Identification
Error Prone Profiling

• When in doubt about an error-prone profile,
  stick with the basics. Consider
• Reported expenses that exceed reported income
  without a reasonable explanation and agency
  assessment of in-kind income
• Conflicting information between client statements
  and data exchange resources
• Previous closure due to loss of contact and/or
  failure to cooperate
• Documentation that appears to be false, altered,
  defaced or illegible
• Previous conviction of public assistance fraud.

14
Medicaid Error Prevention and Identification
Error Prone Profiling

• Annual Validation
• Administrators Memo 05-09
• Expectation of 30 success rate
• DHFS plans for improved data collection and
  longitudinal analysis

15
Medicaid Error Prevention and Identification
Critical Thinking and Interviewing

• Always review budgets for policy accuracy before
  confirmation.
• Ask questions- verbally or in writing- to obtain
  all information necessary to accurately determine
  eligibility. Make a phone call or send a written
  request for information and/or verification.
• Effective communication skills are even more
  critical in the absence of in-person interviews.
• DHFS is working on a valuable addition to
  Process Help to assist eligibility workers with
  the processing of case discrepancies and
  questionable situations.

16
Medicaid Error Prevention and Identification
Effective Documentation

• Ensure all applications contain signatures.
• Document the content of all verbal conversations.
• Substantiate all case actions to improve outcomes
  in fair hearings and fraud proceedings.
• Increase chances that eligibility will be
  considered correct by state and federal Quality
  Control.

17
Medicaid Error Prevention and Identification
Second Party Case Reviews

• Second Party Review Expectations
• Quantity of .9 of caseload
• Manual adds- new worker, FEV, fair hearing
  requests
• Used to identify opportunities for payment
  accuracy improvements at worker, agency and
  program level.

18
Medicaid Error Prevention and Identification
Second Party Case Reviews
19
Medicaid Error Prevention and Identification
Second Party Case Review Findings

• Medicaid Second Party Review Findings
• 97 of cases reviewed considered correct
• Sum of Medicaid overpayments to date 20,116
• Error type
• Client 6
• Agency preventable 46
• Agency 48
• Explore possible reasons for inconsistencies with
  DHFS Quality Assurance findings.

20
Medicaid Error Prevention and Identification
Recipient education

• DHFS and local agencies share the responsibility
  to educate applicants and recipients. To reduce
  the rate of client error, we must effectively
  communicate eligibility, change reporting and
  benefit recovery policies

21
Medicaid Error Prevention and Identification
Recipient education

• At application, local agencies are required to
  distribute
• Medicaid Eligibility and benefits brochure (PHC
  10025)
• Addendum to the CAF (DWSW-2378-1)
• Change Report Form (HCF 10137)
• Notice of Assignment for Support (DES 2477)
• Good Cause Notice (DWSW 2018)
• Recipient rights and responsibilities

22
Medicaid Error Prevention and Identification
Recipient education

• At annual re-determination, local agencies are
  required to distribute
• Addendum to the CAF (DWSW-2378-1)
• Change Report Form (HCF 10137)
• When another program is open and a new Medicaid
  request is made, local agencies are required to
  distribute
• Medicaid Eligibility and benefits brochure (PHC
  10025)
• Addendum to the CAF (DWSW-2378-1)
• Change Report Form (HCF 10137)
• Notice of Assignment for Support (DES 2477)
• Good Cause Notice (DWSW 2018)

23
Medicaid Error Prevention and Identification
Recipient education

• When agencies consistently distribute required
• publications
• Applicants and recipients are informed of their
  rights and responsibilities. As such, they are
  more likely to report timely and accurately.
• Agencies strengthen their position in fair
  hearings and fraud proceedings.

24
Medicaid Error Prevention and Identification
Recipient education

• DHFS is responsible for
• Updating (and providing access to) recipient
  publications through EM page or BEM Forms
  process.
• Suggestions are welcome!
• Complete re-engineering of recipient notices

25
Recoverable Medicaid Overpayments

• All Medicaid client errors and only client
  Medicaid errors
• Agency and system errors are never recoverable.
• Examples of agency error include failure to act
  on reported information, math error , keying
  error, eligibility worker misinterpretation of
  policy, etc.
• A system error is defined as an eligibility error
  that occurred as result of misalignment between
  CARES and program policy.

26
Recoverable Medicaid Overpayments

• Before an overpayment claim is determined, a
  careful review all client attestations, agency
  records and program policy is essential.
• Give full consideration of change reporting, cost
  sharing and advanced notice policies.
• Review and gather all of the facts and relevant
  documentation.
• Medicaid definition of Agency preventable client
  error
• An applicant/recipients responsibility to
  accurately and timely report information which
  impacts eligibility is not supplanted by an
  agencys ability to prevent the error.

27
Recoverable Medicaid Overpayments

• Statutory change July 27, 2005 (s. 49.497)
• Wisconsin has authority to recover costs
  associated with errors that result from an
  applicant/recipient failure to accurately and
  timely report any information that impacts
  Medicaid eligibility or cost sharing obligation.
• Expanded recovery authority to BadgerCare, MAPP,
  Well Woman and Family Planning Waiver

28
Overpayment Identification and Calculation Logic

• Review amount of actual Medicaid claims paid
  during time period in question (reference MMIS
  Overview guide on Eligibility Management Page).
• EDSNET/MMIS -- RC screen
• Review to/from dates of service and paid
  column.
• Dollars and cents (320357 means 3203.57)
• Paid claims include fee-for-service and managed
  care rates.

29
Overpayment Identification and Calculation Logic

• Medicaid cascade
• Non-financial
• Income
• Assets
• Full versus limited benefit
• Funding Source

30
Overpayment Identification and Calculation Logic

• Assess non-financial eligibility
• State residency,
• Age,
• Citizenship/qualifying non-citizen status,
• Pregnancy,
• Disability,
• Parent or Caretaker Status
• Insurance coverage and access

31
Overpayment Identification and Calculation -
Family Medicaid

• Assess income eligibility and cost sharing
  obligation
• Determine highest appropriate FPL on cascade
  based on eligibility factors (MEH 8.1.6)
• Assess cost sharing impact for
• BadgerCare premium obligation
• Healthy Start Deductible and
• Limited benefit subprograms such as FPW

32
Overpayment Identification and Calculation -
Family Medicaid

• BadgerCare Premiums and Healthy Start Deductibles
  for children and pregnant women
• Overpayment is lesser of calculated
  premium/deductible amount or actual paid claims.
• If recipient is determined ineligible, subtract
  any premium paid from the paid claims amount to
  determine overpayment.
• Limited benefit allowance (MEH 6.2.2.2.3.1)
• Family Planning Waiver (FPW)
• A separate application is not necessary.

33
Overpayment Identification and Calculation -
EBD/LTC Medicaid

• If determined non-financially eligible, assess
  asset eligibility with consideration for
• Spousal impoverishment
• MAPP
• Exempt assets such as home, burial, and vehicle
• Trusts and life estates
• Divestment

34
Overpayment Identification and Calculation -
EBD/LTC Medicaid

• Assess potential impact on cost sharing amount
  as a result of income or expense discrepancies
• SSI-Related deductible amounts
• Patient Liability (Institution)
• Cost Share (Community Waivers and FamilyCare)
• Monthly premium (MAPP)

35
Medicaid Overpayment Calculation

• If it is determined that due to a client
  error, a recipient is ineligible for Medicaid or
  contributed an incorrect cost sharing amount, it
  is necessary to obtain the following information
  
• Actual income and expense information to
  substantiate case circumstances, including
  relevant dates of change and report (as
  applicable)
• Amount of paid Medicaid claims for all relevant
  recipients

36
Ineligible overpayment claim

• If after thorough review, it is clear that a
  recipient was completely ineligible for any
  Medicaid subprogram, due to a client-caused
  error, the overpayment amount is equal to the
  entire amount of paid claims during the relevant
  time period (less any BadgerCare or MAPP premiums
  that were paid).

37
Cost Sharing Overpayment Claim

• If after thorough review, it is clear that a
  recipient contributed an incorrect amount toward
  his/her cost of care, due to a client-caused
  error, the overpayment amount is the lesser of
  cost sharing difference or amount of paid claims
  during each month in the relevant time period.

38
Claims Establishment Process

• Follow the instructions in Chapter VIII of the
  CARES Guide to enter the claim.  CARES issues a
  repayment agreement the first business day of the
  month following the date the claim was entered.  
• Local agencies are responsible to
• Enter the claim into CARES.
• Send a manual Medicaid Overpayment Notice ( HCF
  10093 ) indicating the reason for the overpayment
  and the period of ineligibility.
• Record the completed and signed repayment
  agreement on CARES screen BVPA within five days
  of receipt.  
• Record payments on CARES screen BVCP within five
  days of receipt. 

39
Claims Establishment Process

• DHFS will
• Track the issuance of notices of non-payment and
  send automated dunning notices (i.e. past due
  notices).
• Refer past due claims for further collection
  action (i.e. tax intercept) to the Central
  Recoveries Enhanced System (CRES).
• Close the claim when the balance is paid.

40
Overpayment Calculation Examples(Handouts)
41
Future Savings Estimates

• The estimate of Future Savings is a product of
  the number of months remaining in the
  certification period, multiplied by the average
  monthly cost per person.
• DHFS will update the average monthly cost per
  person annually.

42

• Future Savings Calculation Examples(Handouts)

43
Medicaid Benefit Recovery Estimates

• Estimates are provided for demonstration and
  inspirational purposes only.
• Assumptions
• 3 Medicaid payment error rate
• 75 of errors are client caused
• 9-15 of all claims established are collected
  (tax intercept)

44
Increasing Payment Accuracy Present

• DHFS Efforts
• Medicaid Eligibility Quality Control (MEQC)
  Projects
• IRS/PARIS Project
• Payment Error Rate Measurement (PERM)
• Coming Soon Benefit Recovery Training
• Basics and Advanced
• Targeted availability- early 2007

45
Increasing Collections Present

• Local agencies
• Share best practices with DHFS and other agencies
• Simulation Tips
• Overpayment worksheets
• Use contact us on CARES Worker Web
• Explore opportunities to maximize efficiency
• Specialization
• Consortiums

46
Medicaid Error Prevention and Identification
Error Prone Profiling

• Integrated Quality Assurance Tools (IQAT)
  Automation of Error Prone Profiling
• Front-end verification tool that helps prevent
  errors before they occur.
• Various levels of error prone flags
• Workflow integration
• Targeted eligibility reviews
• Effective collection of outcome data
• Integration with fraud, fair hearings, IM
  complaints received by DHFS, etc.

47
Increasing Collections Future

• Tax Intercept
• Implementation targeted for February 2007
• Improved simulation functionality and review
  modules

48
Discussion and Questions