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Joint Semi-Annual Interagency Coordination Report
March 1, 1999 – August 31, 1999

Pursuant to §531.103, Texas Government Code, as adopted by Senate Bill 30, 75th Legislature, 1997


Activities of the Health and Human Services Commission and the
Office of the Attorney General in
Detecting and Preventing Fraud, Waste, and
Abuse in the State Medicaid Program


 

MEMORANDUM OF UNDERSTANDING

Pursuant to the requirements under Senate Bill 30 of the 75th Legislature, a memorandum of understanding (MOU) executed in April 1998 between the Office of Investigations and Enforcement (OIE), Texas Health and Human Services Commission (HHSC), and the Office of the Attorney General (OAG), proves to be beneficial to both agencies. It assists in clarifying the roles and expectations between HHSC's Medicaid Program Integrity Department (MPI) and the Medicaid Fraud Control Unit (MFCU) of the OAG in their collective mission to detect and prevent fraud, waste, and abuse in the Medicaid program.

The OAG's Elder Law and Public Health Division (ELD), which is responsible for investigating and prosecuting civil Medicaid fraud claims, entered into a separate MOU with HHSC. This agreement, required by sections 531.103 and 531.104 of the Texas Government Code, delineates both agencies' roles in handling civil fraud claims under the Medicaid Fraud Prevention Act, found at Chapter 36 of the Human Resources Code.

Beginning with Fiscal Year 2000, the agreement between HHSC and ELD will be merged into the MOU between HHSC and MFCU. Thus, there will be one agreement, covering numerous matters, between HHSC and OAG. As of the date of this report, the agreement is in final draft stage, and is expected to be executed by the parties in the first quarter of Fiscal Year 2000.

INTERAGENCY COORDINATION EFFORT

The two agencies recognize the importance of regular communication in presenting a united front in the fight against healthcare fraud and abuse in the Medicaid program. Monthly meetings between staff of the MPI and MFCU formally began in May 1998. The communication that these meetings established helped to identify new trends in fraud, increased accountability, and generally improved the working relationship between the two agencies. In the spring of 1999, the meetings were increased to twice monthly and expanded to include the OAG's Elder Law and Public Health Division (ELD) as well as staff from OIE's utilization review program.

In addition to participating in the regular meetings between MPI and MFCU, ELD has begun working closely with the staff of MPI and MFCU to develop procedures for referring potential civil Medicaid fraud matters to ELD.


Medicaid Fraud and Abuse Referrals Statistics


HHSC's MEDICAID FRAUD, ABUSE, AND WASTE REFERRAL STATISTICS

The Health and Human Services Commission's Office of Investigations and Enforcement statistics for the third and fourth quarters of Fiscal Year 1999 are as follows.

Action

3rd Quarter

4th Quarter

Total

Cases Opened

524

1182

1706

Cases Closed

303

470

773

Providers Excluded

11*

4*

15

* Notification of Medicaid exclusion to providers who were excluded from Medicare in the third and fourth quarters has been delayed due to procedural changes. Notification will be completed in the first quarter of Fiscal Year 2000.

HHSC's MEDICAID FRAUD, ABUSE, AND WASTE RECOUPMENTS

The Health and Human Services Commission's Office of Investigations and Enforcement recoupments for the third and fourth quarters of Fiscal Year 1999 are as follows.

Office of Investigations and Enforcement Departments

3rd Quarter

4th Quarter

Adjustments

TOTAL

Medicaid Program Integrity

$879,735

$874,303

 

$1,754,038

Utilization Review (hospitals)

$12,299,321

$8,326,549

$2,535,362

$23,161,232

Case Mix Review (nursing homes)

$1,379,051

$1,562,212

$147,628

$3,088,891

Compliance Monitoring and Referral

$3,358,243

$3,157,080

 

$6,515,323

Surveillance and Utilization Review Subsystems (SURS)

 

 

 

$2,184,623*

TEFRA Claims

 

 

 

$45,025

Medicaid Fraud and Abuse Detection System (MFADS)

$307,950

$276,939

 

$584,889

TOTAL

$18,224,300
$14,197,083
$2,682,990
$37,334,021

* Total includes amount recovered by SURS for Fiscal Year 1999 ($2,023,644) plus civil monetary penalties ($160,979).


 

MEDICAID PROGRAM INTEGRITY

The Medicaid Program Integrity Department (MPI) has primary responsibility for activities relating to the detection, investigation, and sanction of Medicaid provider fraud, abuse, waste, and neglect across all Texas state agency lines, regardless of where the provider contract is administered. For purposes of Medicaid provider fraud abuse, waste, and neglect it acts as the Commission's liaison with the following state and federal agencies:

MEDICAID PROGRAM INTEGRITY REFERRAL SOURCES

MPI receives complaints and referrals from a variety of sources and develops those complaints or referrals as appropriate. Examples of these sources include:

MEDICAID PROGRAM INTEGRITY COMPLAINTS AND REFERRALS CASE DEVELOPMENT

MPI conducts a preliminary investigation on all complaints and referrals alleging Medicaid provider fraud or abuse or historical non-compliance. If this preliminary investigation produces evidence of provider program abuse, the investigation continues. By federal law, 42CFR§455.15 and §455.21, all cases of suspected provider fraud are to be referred to the Medicaid Fraud Control Unit of the Office of the Attorney General.

 

MEDICAID PROVIDER SANCTIONS/ADMINISTRATIVE PENALTIES

HHSC's Medicaid Program Integrity (MPI) has the authority to impose provider sanctions that could include:

MPI also may take administrative actions against providers that could include:

 

OFFICE OF THE ATTORNEY GENERAL'S MEDICAID FRAUD CONTROL UNIT

The Medicaid Fraud Control Unit (MFCU) of the Office of the Attorney General of Texas (OAG) has been conducting criminal investigations into allegations of wrongdoing by Medicaid providers within the Medicaid arena since 1979. According to federal legislation:

 

CRIMINAL INVESTIGATIONS

The unit conducts criminal investigations into allegations of fraud, physical abuse, and criminal neglect by Medicaid providers--physicians, dentists, ambulance companies, laboratories, podiatrists, nursing home administrators and staff--in the Medicaid arena. Common investigations include assaults and criminal neglect of patients by Medicaid providers or occurring in a Medicaid facility, fraudulent billings by Medicaid providers, misappropriation of patient trust funds, drug diversion by Medicaid providers and/or their employees, and filing of false information by Medicaid providers.

The unit does not conduct civil investigations, impose provider sanctions, or take administrative action against Medicaid providers. Its investigations are criminal; the stakes for providers are imprisonment and fines. The unit does not have prosecutorial authority. The unit's cases are presented to state and federal authorities for criminal prosecution. Once referred, these prosecutors determine whether a case will be accepted or declined for prosecution. And once a case is accepted, the prosecuting authority determines the course of the case.

MFCU'S REFERRAL SOURCES

The Medicaid Fraud Control Unit receives referrals from a wide range of sources--concerned citizens, Medicaid recipients, current and former provider employees, other state agencies, and federal agencies. Although unit staff review every referral received, they cannot investigate each one. There are neither the human or monetary resources to do so. Therefore cases are prioritized. Even then, there may only be enough resources to look at a slice of the Medicaid provider's activity. The unit strives for a blend of simple and complex cases, and big and small cases representative of Medicaid provider types.

 

MFCU's MEDICAID FRAUD AND ABUSE REFERRAL STATISTICS

The Medicaid Fraud Control Unit statistics for the third and fourth quarters of Fiscal Year 1999 are as follows.

Action

3rd and 4th Quarters FY1999

Cases Opened

166

Cases Closed

88

Cases Presented

50

Criminal Charges Obtained

28

Convictions

17

Overpayments and Misappropriations Identified

$5,800,696.56

Cases Pending

311

 


OFFICE OF THE ATTORNEY GENERAL
Elder Law and Public Health Division

In August of 1999, Attorney General John Cornyn created the Civil Medicaid Fraud Section within OAG's Elder Law and Public Health Division (ELD). Prior to that time, although ELD was responsible for investigating and prosecuting civil Medicaid fraud cases under Chapter 36 of the Texas Human Resources Code (the Medicaid Fraud Prevention Act), OAG had relatively few investigations – and no lawsuits – regarding civil Medicaid fraud.

With the creation of the Civil Medicaid Fraud Section, OAG has dedicated the resources and efforts of the Elder Law and Public Health Division to fighting fraud, waste and abuse in the Medicaid system. Under the Medicaid Fraud Prevention Act, the Attorney General has the authority to investigate and prosecute any person who has committed an "unlawful act" as defined in the statute. ELD, in carrying out this function, is authorized to issue civil investigative demands, require sworn answers to written questions, and obtain sworn testimony through examinations under oath. All of the investigative tools can precede the filing of a lawsuit based on any of the enumerated "unlawful acts." The remedies available under the Act are extensive, and include the automatic suspension or revocation of the Medicaid provider agreement and/or license of certain providers.

The Medicaid Fraud Prevention Act also permits private citizens to bring actions on behalf of the State of Texas for any "unlawful act." In these lawsuits, commonly referred to as "qui tam" lawsuits, OAG is responsible for determining whether or not to prosecute the action on behalf of the State. If OAG does not intervene, the lawsuit is dismissed. On the other hand, if OAG intervenes and prosecutes the matter, the private citizen – the "relator" – is entitled to a percentage of the total recovery.

In its brief existence, the Civil Medicaid Fraud Section has already begun receiving referrals from HHSC, and has also received a handful of "qui tam" lawsuits. OAG intends to dedicate a significant level of resources towards these civil Medicaid fraud efforts, and will increase those resources as necessary to accomplish the purposes of the Medicaid Fraud Prevention Act.

 


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