Medicare Herds Four Anti-Fraud Programs Under One Roof

The agency that runs Medicare has created a mega anti-fraud program out of four component programs, a move that promises economies of scale and a better focus on state-specific issues.

The new contractor will be the first to bridge Medicare and Medicaid and could bring more consistency to fraud and abuse audits in both programs. The mega-contractor will perform the duties performed by the previous contractors, including data mining, investigations, referrals to law enforcement, claims auditing, provider education, and other prevention activities.

The consolidated contractor is designed to end the problem of unaligned programs failing to detect providers that had been caught for fraud elsewhere in the country. In some cases, after Medicare blocked a fraud scheme, bad providers could relocate and fraudulently bill a Medicaid program in another state.

A December 2017 report from the Government Accountability Office highlighted some of the problems the Centers for Medicare & Medicaid Services had in aligning its anti-fraud work across Medicare, Medicaid, and other federal programs. The GAO report described the lack of communication between Medicare and Medicaid and recommended more alignment between the two programs.

The new program, called Unified Program Integrity Contractor (UPIC), creates a central nexus that can facilitate better communication between Medicare and Medicaid and stop fraud schemes from migrating back and forth.

The program will facilitate data sharing by removing some of the silos between Medicare and Medicaid, Judith Waltz, a health-care attorney with Foley & Lardner in New York, told Bloomberg Law.

Three Contracts

The awards went to three contractors that proposed the lowest reasonable costs to the CMS. For example, Health Integrity, which is now known as Qlarant, was awarded a UPIC contract covering 13 states after submitting a cost proposal of $85.8 million, which topped AdvanceMed’s $106 million proposal. AdvanceMed protested the contract reward, but the protest was denied by the GAO.

The CMS awarded UPIC contracts in five geographic jurisdictions. SafeGuard Services in Camp Hill, Pa., won contracts covering the northeastern and southeastern jurisdictions, while Easton, Md.-based Qlarant won the contracts for the western and southwestern jurisdictions.

AdvanceMed in GroveCity, Ohio, was awarded the remaining midwest jurisdiction contract.

CMS’s Comprehensive Medicaid Integrity Plan for Fiscal Years 2014-2018 was the main driver for consolidating those four into the UPIC program, Jacinta Alves, an attorney with Crowell & Moring LLP in Washington, told Bloomberg Law. Streamlining Medicaid fraud and abuse oversight was one of the plan’s chief proposals.

Benefits of Consolidation

Fewer contractors can bring value to the CMS with less overhead and a more consistent set of policies, Waltz said. Many health-care providers and suppliers participate in both programs, and fraud, waste, and abuse are likely to cross back and forth between Medicare to Medicaid, Waltz said.

The Medicaid program also gets a lot of federal funding, so the CMS has a vested interest in rooting fraud out of that program, she said. The federal government spent approximately $376.6 billion on state Medicaid programs in fiscal year 2017. Federal spending typically averages 60 percent of an individual Medicaid program’s funding, with the states kicking in the remainder. Poorer states like Alabama and Mississippi receive more federal Medicaid funding.

The three main CMS anti-fraud contractor programs also include the Recovery Audit Contractors and the Comprehensive Error Rate Testing Program, in addition to the UPICs.The RACs are tasked with detecting and recovering health-care overpayments, while the CERT program calculates the improper payment rate for Medicare fee-for-service.

The UPICs have the potential to do better preventing Medicaid fraud and abuse than the now-shuttered Medicaid Integrity Contractor program, which Ellyn Sternfield, an attorney with Mintz, Levin, Glovsky, and Popeo PC in Washington, called “an abject failure.”

That program didn’t grasp the differences among state Medicaid programs and sometimes audited for compliance with rules not actually in effect during the time of the conduct at issue, Sternfield said.

The newly updated CMS Medicaid Integrity Manual stipulates that before any UPIC investigation begins, the contractor will consult with the state to ensure that it is not duplicating existing efforts.

The UPICs may have stronger investigative capabilities than some providers are used to, because they are authorized to use a state’s look-back period when they’re requesting documents during an investigation. The look-back period refers to how far back a contractor can request documents, and for some states that can be more than five years, Waltz said.