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State Fights Medicaid Fund

Posted on: Monday, 22 August 2005, 03:01 CDT

West Virginia's Medicaid prograin has been in the spotlight for months because of projected budget shortfalls and subsequent program cuts.

But state officials say one part of the program is excelling fraud prevention.

The West Virginia Medicaid Fraud Control Unit, which is part of the state Department of Health and Human Resources (DHHR), recovered more than $7.1 million last year in restitution or civil fines paid by Medicaid providers found guilty of fraud. On average, the unit generates about $4.18 for every $1 it spends investigating fraud.

"This is an efficient and shining example of the program," said John Law, DHHR communications director. "This also is an example of why we need to look at the whole program to be sure it runs as efficiently as possible."

As the state awaits federal cutbacks in Medicaid funding, DHHR has been reviewing the entire $3 billion Medicaid budget to see where improvements can be made and expenses can be trimmed.

When it comes to fighting fraud, however, West Virginia's Medicaid program already is top notch, Law said.

According to Sam Cook, director of the Fraud Control Unit, West Virginia's effort began in 1978 after the federal government made fraud a priority.

"We look at provider fraud, anybody who can sell anything to Medicaid. It's not just doctors and hospitals," Cook said.

Vendors include doctors, dentists, chiropractors, hospitals, clinics and even non-medical providers whose work gets billed to Medicaid.

DHHR Inspector General Molly Jordan said Cook's office has three main areas of expertise - information technology, auditing and investigations, which can involve undercover work. The office's investigators have police backgrounds, and a nurse on staff helps them wade through the medical jargon.

Cook is the only attorney on staff, but any prosecutions or civil cases involve the U.S. Attorney's Office because the federal court system deals with Medicaid fraud.

To be clear, Cook looks for fraud, not simple billing mistakes.

"I deal with honesty," he said "The Bureau for Medical Services recovers a lot of money from billing disputes, but those do not reflect on a person's honesty."

Fraud, Cook said, "is lying on paper to get money."

Common fraud infractions include "up-coding," which refers to a medical office coding a service as being more complex, and thus more expensive, than what actually was provided.

"There are only 24 hours in a day. You can add all the codes up, which represents time periods, and see whether there is up-coding," Cook said.

Another kind of fraud involves pharmaceuticals, "giving people drugs that are inappropriate in return for cash payments," he said.

Cook said the Fraud Unit works with other health care entities when investigating fraud complaints.

"If a person is cheating Medicaid, they're generally cheating Medicare or private insurance, too," he said.

Fraud is an offense, but not all fraud offenses require criminal prosecution. Some can be dealt with through a civil lawsuit, while others require both criminal and civil proceedings. But has Cook ever lost a case? He hasn't had the chance.

"I've never tried a case since I've been here because everyone always pleads guilty or settles," he said.

"We're successful because we're always prepared, and we always hit the ground running."

Since West Virginia's Medicaid budget is matched roughly three to one by the federal government, any money recovered by a fraud investigation is returned to the program in that proportion.

"Our first mandate is to recover funds for the program so the prograin is made whole, and the taxpayers are made whole," Cook said.

The office receives hundreds of complaints, weeds out the meritless claims and resolves between 20 to 25 cases each year. Six or eight of them may be national cases where several states' Medicaid fraud units worked together, Cook said. The rest are West Virginia-specific cases.

"If I decide to look into it, I'd say it's about 80 percent certain that there's something that needs to be taken care of. But remember, we live on the margins," Cook said. "We're taking about 0.1 percent of providers because 99.9 percent of the medical providers are honest."

As the medical community revolutionizes its data management with electronic records, Cook said his office will continue to adapt.

"People are getting smarter (about fraud) ... and we are, too," he said. "Computers have changed the world. We all know a lot more about computers than we did 10 to 12 years ago, but you have to."

Copyright State Journal Corporation Jul 22, 2005

Source: State Journal, The

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