All This Talk About Provider Medicaid Fraud…What about MCO Fraud?
Everyday in the Medicaid world, we hear accusations or stories about health care providers committing fraud. But what about MCO fraud? Who or what is monitoring the MCOs for potential fraud? And what would MCO fraud look like?
First, what is an MCO?
Managed Care Organizations (MCOs) are the healthcare organizations that manage state’s Medicaid, including the finance, implementation of health services, and health care provider eligibility in the Medicaid contract.
MCO fraud looks different from provider fraud. Provider Medicaid fraud could be providing excessive services, double-billing for services, etc. MCO fraud could be the implementation of cost-savings procedures that lead to underutilization or denial of medically necessary services.
Specific examples of MCO fraud: (These examples are all make-believe. Any similarity to an example and real-life is unintentional):
- MCO denies medically necessary ACTT services and discharged Medicaid recipient is sent to Outpatient Behavioral Therapy as a “step-down.” Recipient does not receive necessary services and commits crimes, ultimately leading to incarceration.
- MCO denies enrollment of a health care provider who provides residential services to teenagers with severe mental illnesses, some with violent tendencies. Provider (because of lack of Medicaid contract) is no longer allowed to care for the residential teenagers. Residential facility closes and teenagers are on the streets.
- MCO denies so many health care providers in a certain county that Medicaid recipients have multi-month waiting periods before receiving services. During the multi-month wait, another Connecticut slaughter occurs, but in North Carolina.
These are serious repercussions. These serious repercussions (although the exact results would be unknown) are being sent into action by MCOs’ underutilization of quality health care providers and denials of medically necessary services.
Why would an MCO commit fraud? (Which is what I am calling underutilization of providers and denials of medically necessary services)?
MCOs are Prepaid Inpatient Health Plan entities (PIHPs). Meaning that each fiscal year, the MCOs are given a lump sum from the Department of Health and Human Services (DHHS), in a combination of federal and state money. That lump sum is used throughout the year to fund all Medicaid services (the services managed by the MCOs) for all Medicaid recipients in that particular MCO’s jurisdiction, sometimes 10+ counties.
It is in the best interest of an MCO, as a business in the business to be profitable, to refuse to enroll providers and deny services in order to save expenses.
Furthermore, MCO contribute a percentage to a “risk account” throughout the contract period. When the contract is fulfilled and DHHS determines that the MCO fulfilled the agreement, the MCO is entitled to keep all the money in the risk account.
So, in essence, I agree that we, as a state, need to discover, and then prosecute, provider Medicaid fraud. Medicaid fraud costs taxpayers an exhorbitant amount of money.
But, my question is, who is discovering the MCO fraud? MCO fraud may not cost taxpayers money directly, but, even worse, MCO fraud causes health care providers to NOT be able to provide medically necessary services to those most in need. MCO fraud causes Medicaid recipients to NOT receive needed services. Which fraud is worse?
Posted on April 10, 2013, in DHHS, Division of Medical Assistance, Health Care Providers and Services, MCO, Medicaid, Medicaid Audits, Medicaid Contracts, Medicaid Fraud, Medicaid Recipients, Mental Health, North Carolina, Outpatient Behavioral Health, Provider Medicaid Contracts, Taxpayers, Termination of Medicaid Contract and tagged Administrative Law Judge, Centers for Medicare and Medicaid Services, DHHS, Division of Medical Assistance, Health care provider, Managed Care Organizations, Medicaid, Mental health, North Carolina. Bookmark the permalink. 4 Comments.