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Welcome to the Pondera FraudCast, a weekly blog where we post information on fraud trends, lessons learned from client engagements, and observations from our investigators in the field. We hope you’ll check back often to stay current with our efforts to combat fraud, waste, and abuse in large government programs.


Greg Riley
Greg Riley
Pondera's FraudCast Blog
Provider Screening and Program Integrity in Medicaid Managed Care

Provider Screening and Program Integrity in Medicaid Managed Care

Medicaid expenditures have nearly doubled over the last decade [1] and states have increasingly looked to a capitated reimbursement model utilizing managed care organizations (MCO) to ensure continued access to quality health care services. The Centers for Medicare and Medicaid Services (CMS) estimate that roughly 80% of all Medicaid recipients currently receive healthcare services via managed care [2]. While the managed care model differs from the fee-for-service (FFS) system in the manner that state Medicaid agencies reimburse for services, the two systems share many of the same risks from a program integrity perspective. One of the shared vulnerabilities that persists is the substantial hurdle states and Medicaid MCOs encounter when determining the eligibility of prospective providers.

Eligibility screening of providers, both upon application and periodically thereafter, is the cornerstone of any successful Medicaid integrity program. This process identifies those prospective and current providers who are statutorily prohibited from participation due to disqualifying events. However, according to a recent report by the U.S. Government Accountability Office (GAO), the screening process is complicated by the reality that the information needed to ensure the eligibility of providers is scattered across numerous databases maintained by different federal agencies [3]. Additionally, many of the state agencies and MCOs assessed by the GAO reported difficulty accessing some sources and cross-referencing potentially disqualified applicants across databases.

This issue became even more pressing recently when CMS issued a long-anticipated rule (CMS 2390-F) that, for the first time, places the responsibility to appropriately screen and enroll all managed care providers squarely on the shoulders of the states [4].

Pondera's core detection tool, FDaaS, provides a ready solution to these challenges by merging these disparate data sources with proprietary fraud algorithms to assist users in identifying those bad actors who present a risk to the Medicaid program.

You can read the GAO report in its entirety at this link.

[1] U.S. Department of Health and Human Services. (2011). Medicaid manged care: Fraud and abuse concerns despite safeguards. Washington, D.C.: U.S. Government Printing Office.

[2]Centers for Medicare & Medicaid Services. (2015). Managed Care. Retrieved June 6, 2016, from Medicaid.gov: https://www.medicaid.gov/medicaid-chip-program-information/by-topics/delivery-systems/managed-care/managed-care-site.html

[3] U.S. Government Accountability Office. (2016). MEDICAID PROGRAM INTEGRITY: Improved Guidance Needed to Better Support Efforts to Screen Managed Care Providers. Retrieved from http://www.gao.gov/products/GAO-16-402

[4] Centers for Medicare & Medicaid Services. (2016). Medicaid and Children's Health Insurance Program (CHIP) Programs; Medicaid Managed Care, CHIP Delivered in Managed Care, and Revisions Related to Third Party Liability. Retrieved from https://www.gpo.gov/fdsys/pkg/FR-2016-05-06/pdf/2016-09581.pdf

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