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Cutting Medicaid ain’t easy, Part 9,257

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Illinois

* The Associated Press looks into “cutting fraud” as the answer to solving a big portion of Illinois’ Medicaid funding woes…

Sen. Kirk Dillard, R-Hinsdale, has argued for years that much of Illinois’ Medicaid problem could be solved by rooting out waste and abuse. He says experts believe 10 percent of Medicaid money is spent improperly, which would amount to nearly $1.5 billion in Illinois.

Unfortunately, there’s little evidence to support that claim.

Dillard attributes the figure to the New York Times. He doesn’t specify, but he may be referring to a series of stories in 2005 on fraud in the New York state Medicaid program. The 10 percent figure popped up for two different kinds of fraud and abuse. One was an estimate of the problem in New York’s badly run Medicaid program, and the other was an estimate of losses in all health care nationwide, not just Medicaid.

Neither figure says anything about fraud and abuse in the average state Medicaid program.

A 2010 report by the National Health Care Anti-Fraud Association said a conservative estimate of fraud in the nation’s total health spending _ not Medicaid alone _ would be 3 percent, although it also noted the FBI had put the rate at somewhere between 3 percent and 10 percent. A spokesman for the group recently put national fraud loss at “tens of billions of dollars” but wouldn’t be any more specific.

The Illinois Department of Healthcare and Family Services says it’s not aware of any 10 percent fraud estimate and doesn’t consider it to be accurate. The department’s fraud recovery each year amounts to tens of millions of dollars _ nothing close to the hundreds of millions that Dillard envisions.

Discuss.

posted by Rich Miller
Monday, May 7, 12 @ 9:59 am

Comments

===A 2010 report by the National Health Care Anti-Fraud Association said a conservative estimate of fraud in the nation’s total health spending _ not Medicaid alone _ would be 3 percent, although it also noted the FBI had put the rate at somewhere between 3 percent and 10 percent. A spokesman for the group recently put national fraud loss at “tens of billions of dollars” but wouldn’t be any more specific.===

“By Sundown Tomorrow, Dillard will have the firm numbers …”

This is what is wrong with everyone involved, both parties, etc..

Show specifics, get down to the brass tax, make a decision to get something, ANYTHING, constructive done, and then go to a Step 2, 3, 4 …

The next thing we will hear is that Rodogno wants cuts, not tax or fee increases, but will give no cuts, or what those cuts will save. Enough already. Give us something to hang our hats on, or we should all just give numbers.

I’ll go first …

“I believe that 7.23% of Medicaid is fraud, I dunno how I came up with the 7.23%, but its less than Dillard, and more than 3% so I will stick to that and not say anything more.” (This is snark, I have no clue what the number is, but I am sure its greater than 1%)

Anyone else want to try? Or should we all try to find a solution. I will hold my breath now.

Comment by Oswego Willy Monday, May 7, 12 @ 10:07 am
Fraud and abuse is an easy political target, but some of Dillard’s more well read caucus mates will tell you we don’t ’solve Illinois’ Medicaid problem’ by tightening up on fraud and abuse alone.

We’re at an interesting crossroads in this debate whatever the GA passes may take several months to sort out, implement, and determine the downstream impact as beneficiaries and providers begin to realize what’s changed…

Comment by Waffle Fries Monday, May 7, 12 @ 10:07 am
I don’t know if the number is that high, but it’s definitely a legitimate problem worth looking into.

One example from a 2-09-12 Tribune story: In a letter sent to the Obama administration this week, Hamos wrote that nearly 6 percent — or about 100,000 — medical identification cards sent to households were returned to her agency as “undeliverable with out-of-state addresses.”

The truly frustrating part is that it’s taken this fiscal nightmare for some of our officials to begin considering doing their jobs. Perhaps we wouldn’t be in such bad shape now had they done so earlier.

Comment by Anonymous Monday, May 7, 12 @ 10:10 am
Just because it won’t save every single penny we need to save doesn’t mean we shouldn’t be cutting out waste and fraud.

Comment by Cheryl44 Monday, May 7, 12 @ 10:14 am
Does this waste include coverage of certain procedures, financial levels that shouldn’t be covered?

Comment by Wensicia Monday, May 7, 12 @ 10:19 am
Cheryl44 is so right about this. Every single person who defrauds the system and every single dollar of waste embedded in the system takes away from the legitimate recipients’ ability to receive timely care and from legit medical service providers to receive timely payment. It’s long past time that serious policy people start doing something about it rather than so many just pooh-poohing that waste and fraud don’t really amount to all that much.

Comment by Responsa Monday, May 7, 12 @ 10:31 am
@Cheryl -

If the goal is to “root out all fraud and abuse,” then by all means, let’s go after every single penny.

But if the goal is to save the state money, it doesn’t make sense to spend $1 so you can save a penny.

That said, there is low-hanging fruit in a couple of areas:
- Verifying eligibility of enrollees
- Data-mining to identify providers who are abusing the system. For example, two years ago reporters found that a single doctor was responsible for the vast majority of prescriptions to nursing home patients for a particular psychotropic drug. Data mining would have caught him loooong before the Chicago Reporter.

My response to Dillard and the “fraud and abuse” folks generally is two-fold.

One, the vast majority of “waste” in our health care system isn’t illegal: its public policy of the state set by lawmakers like Dillard.

- We warehouse people with mental illnesses and others who don’t need 24 RN care in nursing homes, which is extremely wasteful;

- We spend less than 3 percent of our state budget on public health programs like smoking prevention, drug and alcohol abuse prevention, obesity prevention, and domestic violence and child abuse prevention…creating much bigger and costlier problems for our Medicaid system down the road;

- Despite the well-recognized fact that the reason for the steep rise in Medicaid costs is chronic unemployment, we spend 27 percent less than the recommended level on K-12 education, are slashing early childhood learning programs, cutting job training programs through our community colleges and nonprofits, and making four-year colleges unaffordable for even the Middle Class.

If Kirk Dillard is looking for waste and fraud, he doesn’t need to look any further than the state capitol.

Comment by Yellow Dog Democrat Monday, May 7, 12 @ 10:32 am
There is potentially a vast difference between the percentage of ineligible enrollees and the percentage of improper spending. For example, the 6% undeliverables may represent little, if any, spending, because they are, ta-da, out of state. Others may not respond to requests for reconfirmation because they are not currently using the program. And, since a large percentage of total spending is on a relatively small part of the enrolled population (AABD), a relatively high fraud rate among the remaining members would still represent a small portion of total spending. It takes more than a cursory look to determine the relationship between individuals enrolled and spending.

Comment by steve schnorf Monday, May 7, 12 @ 10:32 am
I’ve met folks who brag that while they earn salaries in the 6 figure range they manage to get Medicaid to pay medical bills every time their wife gets pregnant. They simply get laid off for a month to qualify . . . It doesn’t sound right to me but they swear it raises not a single eyebrow at the state office . . .

Comment by Blue Grass Monday, May 7, 12 @ 10:34 am
The HFS OIG found 16% in improper payments just a few years ago.

GAO frequently puts the fraud, waste and abuse number at 20% nationally.

Comment by Frank Monday, May 7, 12 @ 10:37 am
I’m not sure anyone is saying that we shouldn’t get the however many people that are defrauding the system - but if you use crazy big numbers that don’t pan out, that doesn’t actually solve the problem.

And… solving the problem is kind of the point.

Comment by haverford Monday, May 7, 12 @ 10:37 am
Another thing to think of on Medicaid fraud, don’t assume the 100,000 out of state addresses are committing fraud or even using the Medicaid card. Many of these folks have tried to call to cancel benefits due to move out of state but could not get through to the offices. Take a look at how of the cards were just a waste of postage, printing and envelopes.

Comment by illilnifan Monday, May 7, 12 @ 10:38 am
Blue, so tell me what kind of 6 figure salary job I can get where I can get laid off for a month whenever I need to and then go back. Could what you are reporting here be another urban myth?

Comment by steve schnorf Monday, May 7, 12 @ 10:42 am
An important consideration for this issue is the actual enforcement. There are undoubtedly costs associated with beefing up oversight on these programs and hiring + training the personnel needed to do it. Reducing fraud in the system is a worthy long-term goal that should be worked into the strategic plan, but there is no switch you can flap and simply reduce it overnight without up-front costs.

Comment by chathamite Monday, May 7, 12 @ 10:46 am
Yellow Dog’s comments shows the problems with the failure of progressives to legislate a better world without morality.

Comment by LIberty_first Monday, May 7, 12 @ 10:54 am
I think the most cost effective way to weed out fraud and abuse is to contract with forensic accountants or detectives to find the culprits and then give them a share of the savings.

Comment by Past the rule of 85 Monday, May 7, 12 @ 10:55 am
==Take a look at how of the cards were just a waste of postage, printing and envelopes.==
True, but probably only 100,000 mailed * $0.50/piece mailed = $50,000 in waste, again not a big number.

Comment by Robert Monday, May 7, 12 @ 10:56 am
I thought this article had some interesting stuff in it. It would be useful for Illinois’ Medicaid program to detail what strategies are currently in use to prevent fraud and abuse.

http://www.governing.com/topics/health-human-services/medicaid-fraud-stopping-model.html

Comment by soccermom Monday, May 7, 12 @ 10:58 am
Past the rule,
As long as those accountants will agree to ONLY be paid based on savings and no upfront state expense, go for it. Oh, and they need to have their audit done in two weeks.
Shouldn’t be a problem.

Comment by Michelle Flaherty Monday, May 7, 12 @ 10:59 am
Michelle,

I meant they would get a commission based on the amount of the fraud. Based on past experience, nothing focuses you as much as commission only pay. I think it should be an on-going process because the fraud will never stop.

Comment by Past the rule of 85 Monday, May 7, 12 @ 11:23 am
The “waste, fraud and abuse” is overly broad. Does it include allowing the children of illegal immigrants on Medicaid that costs $72 million according to Hamos?

If we actually verify (meaning more than 1 pay stub when they originally enroll) and use a real ongoing verification process, the IHA notes (and others agree) that the savings could be $700 million or so. Is this considered waste, fraud and abuse?

Comment by 1776 Monday, May 7, 12 @ 11:26 am
It’s not an urban myth, as the individuals I’m talking about work as brokers and manage to have Medicaid pay for the birth of their children. They are constantly amazed that I’m not also collecting Medicaid benefits until I explain that I’m childless.

Comment by Blue Grass Monday, May 7, 12 @ 11:43 am
==I’ve met folks who brag that while they earn salaries in the 6 figure range they manage to get Medicaid to pay medical bills every time their wife gets pregnant. They simply get laid off for a month to qualify . . . It doesn’t sound right to me but they swear it raises not a single eyebrow at the state office . . . ==

Great story, but the math doesn’t work out. So, these folks are lying or stupid. If you make in the low six figures, say $120k, dropping out of work for a moth would cost $10k. My wife had two c-sections, and, while they weren’t cheap, neither cost $10k.

I also wonder why they don’t have a health plan at work? How do they cover normal medical expenses? Sorry, BG, but the story is not logically consistent.

Comment by Pot calling kettle Monday, May 7, 12 @ 11:57 am
This entire “waste, fraud and abuse” discussion is completely useless, because we’re currently in no position to figure it out. It may exist, it may not exist. Who knows?

We don’t know. Our digital backend for the different areas serviced under Medicaid are pretty much hopelessly obsolete, the databases aren’t ‘clean’, we need data specialists who can build the queries necessary to search out the ‘outliers’ among the multitudes of programs, and then we need a team of investigators to look into the different issues.

There’s just no end to what we will need to accomplish this task, that we currently don’t have.

None of that is going to happen anytime soon, if at all.

Both parties need to get serious.

Comment by Judgment Day Monday, May 7, 12 @ 12:15 pm
Where are you meeting these brokers? And why are they telling you this story when they don’t know you well enough to know you don’t have children? Perhaps you should consider they are just pulling your leg.

Comment by Cheswick Monday, May 7, 12 @ 12:31 pm
Cheryl44 nails it. Every dollar we save on fraud and waste is a dollar that can be put towards other programs or paying down our debt.

Let’s say Dillard is off by as much as 50%. I’ll still take an extra $750 million a year.

Comment by Freeman Monday, May 7, 12 @ 12:36 pm
Blue Grass - Please use this link
http://www.state.il.us/agency/oig/reportfraud.asp

Frank - Citations and links for the HFS OIG and GAO numbers, please.

Comment by Anyone Remember? Monday, May 7, 12 @ 12:36 pm
Freeman, unless it costs me $850 million to find it. Just sayin’

Comment by steve schnorf Monday, May 7, 12 @ 12:41 pm
Well Blue Grass here is some contact information for you.

Illinois State Police
Medicaid Fraud Control Unit
8151 W. 183rd Street
Suite F
Tinley Park, Illinois 60477
Phone: (708) 633-5500

Illinois State Police
Medicaid Fraud Control Unit
801 South Seventh Street
Suite 200 – M
Springfield, Illinois 62703
Phone: (217) 785-3322

Illinois State Police
Medicaid Fraud Control Unit
1100 Eastport Plaza Drive
Collinsville, Illinois 62234
Phone: (618) 346-3434

Comment by Biftwich Monday, May 7, 12 @ 12:48 pm
You have to go after the fraud thing if you want to do anything else.

It is sort of like your buddy who has premium cable and still asks you for beer money. In order to get some help you have to create the impression we are trying to reduce costs and fraud.

Comment by OneMan Monday, May 7, 12 @ 1:46 pm
==Cheryl44 nails it. Every dollar we save on fraud and waste is a dollar that can be put towards other programs or paying down our debt.==

==You have to go after the fraud thing if you want to do anything else.==

As Schnorf has been saying, it’s only worth it if you save more than you spend on enforcement.

Fraud is not wished away. There will always be some bad actors. However, some fraud is easy to find and some takes a lot of time and effort. Enforcement will have diminishing returns as it begins to address the final few percent. The more difficult to prove cases and the very small cases may not be worth pursuing. If BG’s broker friend is willing to forgo $10,000 in wages to get a $2000 benefit, that person may not be worth catching, especially if it would cost the state $3000 to catch the fraud and prosecute the perpetrator.

The trick is to put in place a system that stops most fraud or makes the cost to the potential criminal outweigh the benefit they might receive. In the end, there will still be fraud, but it will be a very small percentage of the total. The only way to have no fraud is to have no program.

Comment by Pot calling kettle Monday, May 7, 12 @ 2:18 pm
I also wonder how many of those who are outraged by Medicare and Medicade fraud have ponied up their sales tax on internet purchases.

Just sayin’

Comment by Pot calling kettle Monday, May 7, 12 @ 2:20 pm
You know, we might not be saving on it right away if we get rid of as much of the fraud as possible right now. Somewhere down the road though, it will be worth the state’s time and money now to show people who might think of doing this that it’s not worth it.

Comment by Cheryl44 Monday, May 7, 12 @ 4:05 pm
http://www.state.il.us/agency/oig/docs/Passive%20Analysis%20092910.pdf

Comment by Frank Monday, May 7, 12 @ 4:07 pm
Nobody’s against getting rid of waste and fraud in Medicaid, but even if the 10% fraud figure was accurate, and even if you could operate at 100% efficiency, it’s a pipe dream to think it will put off the reckoning of health-care costs, whether it’s Medicaid, Medicare, private insurance or no insurance.

The advances in medical knowledge continue to be exponential. We can all live longer and better. We all want to live forever. And it costs a lot of money.

Who gets what, and who pays?

Get comfortable, because this issue isn’t going away soon.

We need smart veterans like Dillard — governor’s legislative liaison, governor’s chief of staff, long-time senator — that aspire to the Big Chair to put their noses to the grindstone working for realistic solutions, on the state and national levels, in the public and private sector.

There are plenty of others who can dodge issues with the usual, shallow, talking points about “fraud.”

And Blue Grass, sign me up for one of those sweet “broker jobs” where you can pull down $100k (with no insurance, apparently, or COBRA requirement), get laid off for one month, then have Medicaid pay expenses for a pregnancy (my wife and mother must have been lazy; they took a full nine-months for their pregnancies).

Sounds like a sweet ride.

Comment by wordslinger Monday, May 7, 12 @ 4:51 pm
Yeah, Blue Grass — this doesn’t make a lot of sense. My doctors always required chunks of payment throughout the prenatal care stage. I believe I had to register with the hospital well ahead of the blessed event, which makes that one-month window even more suspect.

Comment by soccermom Monday, May 7, 12 @ 5:37 pm
Most people here probably don’t understand the problem. It takes talented people to run a system this complicated efficiently and accurately. As most state employment has been demonized, I don’t see the quality people coming to work for the state and be treated so poorly. I am working on part of the medicaid system as a part-time employee and I can tell you that there’s more problems with the workings of the system than fraud and abuse. But there’s a reason I am there, there aren’t enough staff and some have already left. There’s no way the state will be able to hire enough staff, let alone talent. I only wish they would pay me a percentage of the match that I could recover for the state.

Comment by RetiredStateEmployee Monday, May 7, 12 @ 7:07 pm
I supposed I am confused. What is Dillard proposing given that there is already a fraud unit? Is it something like a a forensic audit like some comments suggested or something more? Why wouldn’t just beefing up the fraud department do the trick?

Comment by Danny Monday, May 7, 12 @ 9:56 pm
==What is Dillard proposing given that there is already a fraud unit?==

He is proposing that they not actually cut anything that would effect anyone who might take offense and withhold campaign money or other support or make voters angry.

Comment by Pot calling kettle Monday, May 7, 12 @ 10:30 pm
Wouldn’t you have to hire government bureaucrats to fight the fraud?

Comment by Quizzical Tuesday, May 8, 12 @ 1:21 am
Liscense CPM’s and you will SAVE over 2 million dollars!!! This is a no-brainer. CPM’s are specifically and intensely trained to assist and attend women who desire out of hospital births.

Comment by KBKRN99 Tuesday, May 8, 12 @ 7:00 am
We need to license Certified Professional Midwives and allow them to become Medicaid providers. Even if only 2% of women in the state (1% of Medicaid clients) choose homebirth, which is a service they are already asking for, the state is poised to save 5 millions dollars a year. It’s a win-win-win for all involved. We will save the state money by actually increasing services that women already want!!! Additionally, a Certified Professional Midwife is the ONLY birth provider who has home birth training as a mandatory part of her training so we would be licensing the best, most qualified individuals to provide this service.

Comment by Sheri B. Thursday, May 10, 12 @ 12:10 pm
A critical step toward fundamental Medicaid reform is to repeal Obamacare. The health care law significantly expands Medicaid without offering any solid reforms to address its sustainability. Without repeal, the problems facing Medicaid and the rest of the health care system are extraordinary.
Another key step in fundamental Medicaid reform is to put Medicaid spending on a budget. Although states must balance their budgets, federal Medicaid spending has no limit. The more a state spends, the more federal taxpayers must pay out. Therefore, it is critical that federal Medicaid spending is put on a dependable and sustainable path.

In conjunction with budgetary recommendations, policy objectives must be clear. These policies should reflect the broader goals of establishing patient-centered, market-based solutions that reduce.

Comment by Carly EngageAmerica Friday, May 11, 12 @ 8:48 am