May 10, 2007 For Immediate Release Contact: Tom Salmon, 802-828-2281
May 10, 2007 Tom.Salmon@state.vt.us
Cell phone: 802-376-6101
Medicaid Audit Shows Claim Processing Weaknesses and $883,349 in Potential Improper Payments; Medicaid Office Quick to Address Potential Issues
MONTPELIER –Vermont’s Medicaid health assistance programs had expenditures of nearly $1 billion last year, and Vermont State Auditor Thomas M. Salmon wants to keep an eye on what has become State government’s largest expenditure area.
Salmon today said a new report by his Office identified almost $900,000 in potential improper Medicaid payments and detected flaws in the automated processing system which evaluates the integrity of claims before they are paid. He added that the audit report does hold some good news for Medicaid. “The dollars that we are questioning are relatively small compared to the large number of claims reviewed, and that is good news for the program,” Salmon noted.
Full report: http://auditor.vermont.gov/ Click on “Audits and Reports” and then click on “Special Audits.” Medicaid report on right.
Auditors found about 50 of 600 active claims processing edits and audits were inactive, had errors, or were incomplete, increasing the risk of improperly paid claims. The Electronic Data Systems Corporation (EDS) is the Medicaid fiscal agent and processes claims from its Williston office, and is paid about $750,000 per month to operate and maintain the system. Salmon said EDS and the Office of Vermont Health Access (OVHA), which manages the Medicaid program, have been working proactively with the Auditor’s Office and were quick to make changes in the edits and audits. “Vermont will be saving thousands of dollars a month going forward,” he said.
The report also found that the State paid EDS the full price of $1.2 million for supplemental claims evaluation software in 2005, but two years after payment, the system has not been completely implemented. “Fortunately, the State and its fiscal agent have a timetable right now to get this job finished,” Salmon said, “but until we do, we are losing savings opportunities.” He said the new software is saving the State money, but his report highlighted $388,000 in additional overpayments that might have been prevented had the new software been fully operational.
The report details the results of 13 data mining queries from a universe of about 7 million paid physician and institutional claims between July 1, 2004 and March 31, 2006. Two queries yielded no improper payments – global surgical unbundling and obstetrical care unbundling (different providers).
“We picked up some potential problems with doctors billing high anesthesia units resulting in potential overpayments of $257,050,” Salmon said. He noted that the State’s Medicaid administrator, the Office of Vermont Health Access (OVHA), will have the task of reviewing a detailed list of paid claims that may be improper and seeking recoveries as necessary. OVHA is a department within the Agency of Human Services (AHS).
“AHS Secretary Cynthia LaWare has committed her Agency to improving the claims processing system and beefing up the program integrity team that is charged with detecting fraud, waste or abuse in the Medicaid system,” Salmon noted. “Medicaid is a large, complex program and this commitment to improving controls should be commended,” he said.
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