Georgia’s efforts to fight Medicaid fraud paying off

Source: Centers for Medicare and Medicaid Services

When it comes to Medicaid, Georgia is mostly known for choosing not to expand the health care program for the poor, disabled and elderly under the federal Affordable Care Act.

But the state is also gaining attention for the efforts by Attorney General Sam Olens and the Georgia Department of Community Health to crack down on the pilfering of Medicaid money. A Pew Charitable Trusts’ study ranks Georgia sixth nationally in fiscal 2012 after recovering nearly $100 million in Medicaid funds from fraud cases, according to federal records. Only Texas, New York, California, Florida and Louisiana recovered more.

That figure includes every dollar defendants in criminal and civil cases are required to pay back to the general fund, sometimes over many years. Rob Finlayson, the inspector general for the Department of Community Health, which administers Medicaid in Georgia, said actual dollars returned to the state and federal government totaled more than $56 million in the past two fiscal years.

The Georgia Medicaid Fraud Unit’s mission to stop those who defraud the system is increasingly important. More than 1.5 million Georgians are enrolled in Medicaid at a cost to the state of more than $2.5 billion a year — an increase of $300 million in just the past two years.

And no state has done more with less. Georgia had 36 people in its Medicaid fraud unit in 2012, a team that produced a national-best ratio of recoveries per employee.

The federal government and the state share the cost of Medicaid, with Washington picking up roughly 65 percent of the tab. Money recovered in fraud cases is returned in equal proportions. That translates to about $19.6 million in actual dollars returned to Georgia in the past two years.

Two examples can show how much money is at stake in an individual case:

Finlayson’s team acts as sort of a first line of defense against Medicaid fraud. Finlayson, a former law enforcement officer, said his office has combined technological and human investigations to identify as many questionable Medicaid expenditures as possible.

“We have a responsibility across the board to identify any payment that’s made improperly,” he said. “From the simplest of errors to the bad-guy-go-to-jail fraud.”

It’s not easy work. The health care payment system is every bit as complicated as the tax code.

Every Medicaid payment made in Georgia is at least reviewed by an automated computer system that applies a series of algorithms against the billing record. It can look for duplicate services, coding problems or missing information. The system can automatically stop a payment from being made.

Many of those claims are then reviewed by actual humans.  Finlayson's team includes investigators and clinicians, pharmacists, nurses and others who review questionable cases.

There is no “typical” case, he said. Some cases are caught by automated review or investigators. Others come from whistle-blower hot lines that both DCH and Olens have set up. Some come in the mail or over the phone, Finlayson said.

It’s impossible to know how much Medicaid money is misspent, Finlayson said. Many people in his line of work use 10 percent as an estimate.

“When we talk about improper payments, 90 percent of that 10 percent is anything but criminal fraud,” Finlayson said. “It’s everything up to it. It includes everything from insufficient documentation, a miscoded claim.

“And then you get into more nefarious things.”

Once likely fraud is identified, Finlayson’s team and the Medicaid Fraud Control Unit in Olens’ office turn up the heat.

In March, Olens hired former Cobb County prosecutor Van Pearlberg to take over the unit. Pearlberg quickly instituted a new system for attacking Medicaid fraud. From nursing homes to doctors, speech pathologists and others, the state and its partner counties are looking for every misspent Medicaid dollar they can find.

Pearlberg created new deadlines for reviewing cases and extended the unit’s efforts to identify possible civil cases if criminal charges are not warranted.

The idea, he said, is for the fraud unit to be “swift, efficient and effective.”

The unit has extended its scope as well.

“We have cases in every federal jurisdiction and in a number of other jurisdictions in Georgia,” Pearlberg said.

Fighting fraud is a good thing — within reason — said Donald Palmisano, executive director of the Medical Association of Georgia, the state’s largest doctors organization.

Palmisano said his group supports the state’s efforts to fight actual fraud. Every dollar saved for the Medicaid system makes the program healthier. Health care providers, however, can get caught in the state’s web for honest mistakes, Palmisano said.

“One of the things we get concerned about is just making sure that you don’t have overzealous contractors or prosecutors that are maybe mistaking real fraud from honest mistakes,” he said.

There will never be a shortage of cases. Richard Shackelford, a partner at King & Spalding in Atlanta and past president of the American Health Lawyers Association, said Olens has been “explicit” about making Medicaid fraud a priority.

“There always has been, and I’m sure continues to be, pure, really bad fraud in the health care industry,” Shackelford said. “They should go after those folks.”

Shackelford shares Palmisano’s concern about honest providers who make honest mistakes or who are doing their good-faith best to deal with complicated or ambiguous billing rules.

“Medicaid and Medicare billing is very complex, and there are also inherent ambiguities,” he said. “There are always going to be things that fall through the cracks. People make mistakes. There can be situations where a government enforcement agency misperceives what the provider did in a given situation or a whistle-blower can seize upon a misperception on their part or an ambiguity where they think the provider is doing something wrong when the provider was in fact acting in good faith or just made a mistake. It happens.

“You see more and more of those cases.”