Centers for Medicare and Medicaid Medi-Medi Fraud Detection Program Falls Short

The Medicare-Medicaid Data Match program (Medi-Medi program) enables program safeguard contractors (PSC) and participating State and Federal Government agencies to collaboratively analyze billing trends across the Medicare and Medicaid programs to identify potential fraud, waste, and abuse. Participation is optional. 

 

The Social Security Act mandates that the Medi-Medi program increase the effectiveness and efficiency of the Medicare and Medicaid programs through cost avoidance (i.e., prepayment denials); savings; and recoupment of fraudulent, wasteful, or abusive expenditures. 

 

Consequently, the Department of Health and Human Services (HHS) Office of the Inspector General (OIG) recently released a report evaluating the success (or lack thereof) of the Medi-Medi program.  The report found that the Medi-Medi program “produced limited results and few fraud referrals.”  OIG reviewed an analyzed data between 2007 and 2008.   

 

The 10 states that volunteered to participate in the program received $60 million in appropriations but avoided and recouped only $57.8 million during 2007 and 2008, the OIG found in its review of data from the Centers for Medicare & Medicaid Services, program safeguard contractors, state Medicaid program integrity agencies and other federal and state agencies. 

 

The program produced 66 referrals to law enforcement, and law enforcement accepted 27 of these. Among the 10 participating States collectively, each State averaged 2.8 Medicare referrals to law enforcement per year; law enforcement accepted an average of 1.15 referrals per State per year. In comparison, each State averaged 0.5 Medicaid referrals to law enforcement per year; law enforcement accepted an average of 0.2 referrals per State per year. Also, State Medicaid programs received less benefit from the Medi-Medi program than Medicare received. Of the $46.2 million total in Medicare and Medicaid expenditures recouped through the program during 2007 and 2008, more than three-quarters—$34.9 million—was recouped for Medicare. 

 

The weak results have the OIG questioning whether the Medi-Medi program should be even included in CMS’ overall program integrity strategy.  CMS suggested the report might have been a little hard on the program, noting the review period doesn’t reflect improvements CMS has made, including establishing the Center for Program Integrity, which leads a collaborative effort for Medicare and Medicaid integrity groups to work together.

 

“Since the period of review of this report (2007-2008), CMS has made significant strides in enhancing the effectiveness of the Medi-Medi program and the agency’s overall program integrity efforts,” Acting Administrator Marilyn Tavenner wrote in a letter to the inspector general.”  “The Medi-Medi program has been a useful tool in helping to fight fraud, waste and abuse. The program continues to refer potential fraud referrals to law enforcement, and CMS is examining opportunities to share best practices among states that have had successful referrals.”

 

Background 

 

Section 1893(g) of the Social Security Act (SSA) sets forth the requirements for conducting the Medi-Medi program.6 Section 1893(g) requires that certain program integrity functions be performed. PSCs are expected to perform these functions, which consist of: • identifying program vulnerabilities by using computer algorithms to look for payment anomalies (including billing or billing patterns identified with respect to service, time, or patients that appear suspect or otherwise implausible);

• working with States, the Attorney General, and the Inspector General of HHS to coordinate actions to protect the Federal and State shares of Medicare and Medicaid expenditures; and

• increasing the effectiveness and efficiency of Medicare and Medicaid through cost avoidance (i.e., prepayment denials); savings; and recoupment of fraudulent, wasteful, or abusive expenditures.  

To address the requirements in section 1893(g) of the SSA, CMS requires PSCs to perform program integrity tasks listed in a Medi-Medi Statement of Work (SOW).  During 2007 and 2008, there were 10 SOW tasks listed, such as incorporating a project plan; submitting to CMS a monthly status report; and developing and referring potential fraud cases.  

The Fraud Investigation Database is a nationwide data entry and reporting system designed to track Medicare, Medicaid, and Medi-Medi fraud and abuse data. Under the Medi-Medi program, PSCs are required to enter into the database information about PSC-initiated investigations, cases referred to law enforcement, and payment suspensions related to fraud and abuse.27 State Medicaid program integrity agencies, Medi-Medi partners, and other Federal and State law enforcement agencies use the database to access the information that PSCs enter into it.

Of the three PSCs that did not perform all of the required tasks, all did not develop and refer potential fraud cases in 1 of the 2 years of our review period. Two of those three PSCs did not refer any potential Medicare or Medicaid fraud cases in 2007. The remaining PSC did not refer any potential cases through the program in 2008. 

Moreover, five of the ten participating State Medicaid program integrity agencies report they do not use the Fraud Investigation Database because CMS did not provide access to it. An additional four State Medicaid program integrity agencies reported they have difficulty accessing the database because it is not user-friendly. The remaining State Medicaid program integrity agency reported: “[O]ver the years we have periodically tried to use the [Fraud Investigation Database], but found it to be cumbersome and of limited use.” 

Based on these and other findings, OIG made a number of recommendations to improve the Medi-Medi program, including a complete reevaluation.