Medicaid Giveth, Medicaid Taketh Away

Medicaid Giveth, Medicaid Taketh Away

If your home care and/or home health agency is located in a state with a well-developed Medicaid waiver program, becoming a provider can help you diversify revenue streams and increase your census.  While most states have a waiver program or make home and community based services available through Medicaid, these programs vary greatly by state.  For a state-by-state list of Medicaid waiver programs, click here.   Being a provider of home and community based services (HCBS) through your state Medicaid waiver program can provide a steady stream of clients for personal care and patients for skilled nursing care.  

During the application process to become a Medicaid waiver provider, the agency owner must certify that they have reviewed all of the Medicaid rules and regulations, are familiar with them and agree to abide by them.  The Medicaid rules and regulations are a complex hodgepodge of state and federal statutes, regulations, memos, bulletins and other sometimes difficult to find documents.  While it is unlikely that you will ever be intimately familiar with all of the applicable Medicaid rules and regulations, it is of utmost importance that all agency owners get up close and personal with the rules and regulations on payment and documentation.  Agency owners should also provide training to their staff on the Medicaid billing regulations.

The Centers for Medicare and Medicaid Services (CMS) and state Medicaid Fraud Control Units are very focused on detecting, controlling and recouping improper payments to all Medicaid providers, especially HCBS providers.  The U.S. Department of Health and Human Services, Office of the Inspector General (OIG) conducted a study in 2011 on Medicaid waiver improper payment rates.  As part of its study, the OIG conducted an audit of two states’ HCBS billing and reimbursements.  This audit of only two states resulted in discovery of $61.1 million in overpayments to HCBS providers.  Because there is a limited pool of money for Medicaid services, CMS and the states have great incentive to recover improper payments from providers.

As part of its 2011 study, the OIG determined that one of the main reasons that improper payments (also called overpayments) occur is the provider’s lack of compliance with state and federal Medicaid laws and regulations.  The OIG identified the main reasons for lack of compliance which included:

  • Services were not provided in compliance with State requirements.
  • Services did not have the proper documentation to indicate that they had been rendered.
  • Services were provided during periods when the individuals were in institutions.
  • Caregivers providing services did not meet State qualification requirements.
  • Improper or lack of monitoring of caregivers’ qualifications.

Most instances of a provider’s lack of compliance are due to lack of knowledge of the regulations, not an intentional disregard of the regulations.  However, even when an improper payment is the result of unintentional lack of compliance, the government can still force the provider to pay back the improper payment.  

CMS has developed three “essential tests” to determine if a payment on a Medicaid claim is a valid payment.  These are the questions that a state Medicaid Fraud Control Unit auditor will ask about every claim that he or she reviews during an audit:

  1. Was the recipient eligible for the waiver on the date of service?
    • Providers are responsible to make sure that the recipient is eligible for the waiver services on the day the services were provided.
    • Important for providers to closely track the dates on the service orders and request new orders in a timely fashion before the old order expires.
  2. Was the service billed included in the recipient’s approved service plan?
    • Providers must be sure that the service billed is of the type, scope, amount, duration and frequency specified in the approved service plan?
    • The documentation must contain exactly the services as set forth on the service plan – no more, no less.
  3. Was the service actually provided?
    • The provider’s documentation must support the submitted claim and include the type, scope, amount, duration and frequency of the service.
    • The provider must meet licensure, certification, screening and training requirements necessary to render the service.
    • At an aggregate level, it must be feasible / reasonable that the provider was able to deliver all of the services billed to the Medicaid program.

If the auditor cannot answer “Yes” to each of the above questions for each claim, the government will seek to recover all funds paid to a provider on claims for which the answer to at least one of the questions is “No.”  Most audits by state Medicaid Fraud Control Units are based solely on documentation.  There is usually no field component whereby the auditor goes out in the field to verify if services were provided if the documentation is not compliant.  If the provider’s documentation is non-compliant, it is as if the service was not provided.  If the government treats the claim as one for service that was not provided, the provider will likely have to pay the amount received on the claim back to the government.

In conducting a compliance risk assessment, I would say that the probability of a Medicaid waiver provider being audited by a state Medicaid Fraud Control Unit is low, but the potential impact is very high.  Therefore, this risk is one that although it has low probability, must be addressed by the provider agency.  Consider that on every claim that is audited, the provider has already paid the caregiver that provided the service, paid the employer’s share of the caregiver’s payroll taxes, paid workers’ comp premium and may have paid income tax on the portion of the payment retained by the provider.  This further intensifies the impact of any recoupment efforts by the government.

All Medicaid waiver providers should provide training to their caregivers and their administrative staff on how to properly document Medicaid waiver services.  This training should be part of new employee orientation and part of regular in-service training.  It is also important for providers to conduct regular audits of their Medicaid waiver service documentation to ensure that it is compliant in all respects.  

Don’t let Medicaid take away what you worked so hard to get.

If you need support getting your compliance program on track, contact us today.