The State Medicaid Auditors Who Cried, “Fraud!”
Remember in Aesop’s fables, the boy repeatedly cried, “Wolf.” Each time the villagers ran to help the boy, only to find the boy laughing at the villagers’ naivety. After numerous “fakes,” a wolf truly came to hunt the boy’s sheep. While he feverishly cried, “Wolf” at the top of his lungs, the villagers were nowhere to be found.
Now it seems that the state’s Recovery Audit Contractors (RAC) are mimicking the actions of the boy who cried wolf. How do I make this literary analogy between the boy who cried wolf and the RAC’s actions? Because the purpose of the RACs were to detect fraud. The federal government required all states to implement a state-wide RAC program to detect fraud, not innocent paperwork mistakes.
Fraud is defined as: an intentional deception made for personal gain or to damage another individual.
If you saw WRAL 6:00 news Friday, then you saw one of my clients who had been placed on prepayment review. What a horror story!! My client noticed last August (2012) that the State stopped paying her Medicaid reimbursements. Now six months later she received a notice that her Medicaid contract was being terminated. The reasons were unclear, but the statute under which the State may, first, place a health care provider on prepayment review, and, subsequently, terminating the health care provider’s Medicaid contract was drafted to detect Medicaid fraud.
However, my client did not commit fraud. All the mental health services for which she was paid, were actually rendered for Medicaid recipients. The alleged problems? Innocent paperwork errors, or, in some instances, errors on the part of the RACs.
For example, DMA Clinical Policy 8C requires the service notes to indicate the duration of the service. However, for most of the Outpatient Behavioral Health services, the CPT code, by definition, states the duration. If a provider bills for 90816: the services was 20-30 minutes. Therefore, by the provider writing the CPT code, the provider stated the duration of the service. Yet, the RACs are citing lack of duration written on the service notes, despite the CPT codes providing the duration.
Why? Why would the RACs proceed to audit Medicaid claims crying “Fraud” for these innocent paperwork errors, or in the case of the lack of duration of services, not even errors on the part of the provider?
Good question. I do not have the answers. However, I have theories:
1. Lack of Supervision/Confusion: The RACs have these government contracts to audit Medicaid payments, but the state is not supervising the audits. Basically, the state created these RACs and then turned them loose. The lack of supervision by the state is creating a free-for-all. The RACs are trying to do the jobs for which they were hired, but without guidance.
2. Incentive: Interestingly, RACs are reimbursed by a contingent fee. Meaning, if the contracted companies recover more money from the health care providers, the contracted company received a higher reimbursement.
Now because the contracted companies are paid more if they recover more, does that create a bias? A perceived bias? Certainly a desire by the contracted companies’ employees to recover more Medicaid money; after all, the employees are only human.
Since these RACs have been implemented, many, many providers are having to defend themselves from the allegations of, “Fraud.”
I wonder if crying,”Fraud” so many times, like the boy who cried wolf, will create a sense that maybe fraud truly is not being found. So when the RACs find true fraud, will anyone come running?
Posted on February 11, 2013, in Health Care Providers and Services, Medicaid, Medicaid Fraud, Medicaid Recoupment, Mental Health, Mental Illness, NC DMA Clinical Coverage Policy 8C, North Carolina, Outpatient Behavioral Health, RAC and tagged Aesop's Fables, Boy Who Cried Wolf, Medicaid, Recovery Audit Contractor. Bookmark the permalink. 11 Comments.