Medicaid Overpayments: Prevention, Identification, Calculation and Recovery

1. Medicaid Overpayments: Prevention, Identification, Calculation and Recovery Vicki Jessup & John Haine DHFS/DHCF/BEM

2. Presentation Overview Presentation Focus and Style Medicaid Policy and Process from recent past to present: Facts and Fiction Medicaid Error Prevention & Identification Methods Medicaid Overpayments & Savings Overpayment Calculation Methods & Examples Future savings estimation Methods & Examples Increasing collections- present and future Estimates of recoverable Medicaid overpayments and agency incentives

3. Medicaid Policy & Process: Recent Past Program Simplification & Streamlined Verification - July 2001 Introduction of mail-in application option Mandatory verification, self declaration and “questionable” information New CARES verification codes and functionality (?, Q?, NV, QV) DHFS assumed reliance on available data exchange queries

4. Medicaid Policy & Process: Fact and Fiction Program Simplification & Streamlined Verification - July 2001- continued “If blank, assume no or zero” “There isn’t any Medicaid QC” “Don’t do any FEV for Medicaid” “Don’t worry about overpayments”

5. Medicaid Policy & Process: Present “The right benefits to the right people at the right time.” - Helene Nelson, DHFS Secretary DHFS/DHCF/Bureau of Eligibility Management Goals: Increased program participation (ALL eligible persons) Customer Service Payment Accuracy Reduced workload for local agencies

6. Medicaid Policy and Process: Present “Questionable” Re-defined and Re-emphasized in April 2006 (Ops 06-13) Income verification is required unless the information is currently available to eligibility workers through a source of data exchange. Medicaid verification policy flow chart Access Wisconsin Apply for Benefits (AFB) Report My Changes Check my Benefits

7. Medicaid Policy and Process: Present It is a DHFS expectation that IM agencies will: Effectively and efficiently obtain all information and/or verification that is necessary to accurately determine eligibility. Review eligibility budgets and apply program knowledge prior to confirmation. When warranted by case circumstances, refer Medicaid applicants or recipients for FEV or fraud investigation. When a recoverable overpayment is identified, calculate the amount and establish a recovery claim.

8. Error Prevention is key! Medicaid Eligibility errors result in a significant amount of misspent funds! Medicaid errors primarily attributed to a local agency and/or the CARES/MMIS systems are never recoverable. Recoverable, “client-caused” Medicaid overpayments present a major hardship for low-income recipients. Currently, overpayment determinations and calculations are complex and labor intensive. On average, even with tax intercept, collection of Medicaid overpayment claims occurs at a rate of 15% annually.

9. Methods to Prevent and Identify Medicaid Eligibility and Cost Sharing Errors Medicaid eligibility and cost sharing errors can be prevented and identified with the effective use of: Data exchange resources Error prone profiling Critical thinking and interviewing skills Case reviews and effective documentation Recipient education

10. Medicaid Error Prevention and Identification: Data Exchange Data exchange is a highly effective, reliable and underutilized means to identify recoverable Medicaid errors that are caused by recipient failure to: Accurately report information at application or eligibility review; and/or Timely or accurately report changes in circumstance that impact a recipient’s eligibility or cost sharing amount.

11. Medicaid Error Prevention and Identification: Data Exchange To prevent and identify Medicaid eligibility errors to the fullest extent, it is necessary to effectively utilize all available data exchange information, including: State wage match State new hire Child Support Agencies State Online Query (SOLQ) Unemployment compensation Interstate UC Report (EOS CD70) BENDEX conflict alert (and EOS CD71)

12. Medicaid Error Prevention and Identification: Error Prone Profiling It is DHFS’ expectation that local agencies will routinely evaluate error-prone profiles and update as: Agency conditions change. Profiles do not effectively generate referrals A new and primary error condition has been identified (with consideration for new application, review and change reporting methods).

13. Medicaid Error Prevention and Identification: Error Prone Profiling When in doubt about an error-prone profile, stick with the basics. Consider: Reported expenses that exceed reported income without a reasonable explanation and agency assessment of in-kind income; Conflicting information between client statements and data exchange resources; Previous closure due to loss of contact and/or failure to cooperate; Documentation that appears to be false, altered, defaced or illegible; Previous conviction of public assistance fraud.

14. Medicaid Error Prevention and Identification: Error Prone Profiling Annual Validation Administrator’s Memo 05-09 Expectation of 30% success rate DHFS plans for improved data collection and longitudinal analysis

15. Medicaid Error Prevention and Identification: Critical Thinking and Interviewing  Always review budgets for policy accuracy before confirmation. Ask questions- verbally or in writing- to obtain all information necessary to accurately determine eligibility. Make a phone call or send a written request for information and/or verification. Effective communication skills are even more critical in the absence of in-person interviews. DHFS is working on a valuable addition to “Process Help” to assist eligibility workers with the processing of case discrepancies and questionable situations.

16. Medicaid Error Prevention and Identification: Effective Documentation  Ensure all applications contain signatures. Document the content of all verbal conversations. Substantiate all case actions to improve outcomes in fair hearings and fraud proceedings. Increase chances that eligibility will be considered correct by state and federal Quality Control.

17. Medicaid Error Prevention and Identification: Second Party Case Reviews Second Party Review Expectations Quantity of .9% of caseload Manual adds- new worker, FEV, fair hearing requests Used to identify opportunities for payment accuracy improvements at worker, agency and program level.

18. Medicaid Error Prevention and Identification: Second Party Case Reviews

19. Medicaid Error Prevention and Identification: Second Party Case Review Findings Medicaid Second Party Review Findings 97% of cases reviewed considered “correct” Sum of Medicaid overpayments to date: $20,116 Error type: Client: 6% Agency preventable: 46% Agency: 48% Explore possible reasons for inconsistencies with DHFS Quality Assurance findings.

20. Medicaid Error Prevention and Identification: Recipient education DHFS and local agencies share the responsibility to educate applicants and recipients. To reduce the rate of client error, we must effectively communicate eligibility, change reporting and benefit recovery policies

21. Medicaid Error Prevention and Identification: Recipient education At application, local agencies are required to distribute: Medicaid Eligibility and benefits brochure (PHC 10025) Addendum to the CAF (DWSW-2378-1) Change Report Form (HCF 10137) Notice of Assignment for Support (DES 2477) Good Cause Notice (DWSW 2018) Recipient rights and responsibilities

22. Medicaid Error Prevention and Identification: Recipient education At annual re-determination, local agencies are required to distribute: Addendum to the CAF (DWSW-2378-1) Change Report Form (HCF 10137) When another program is open and a new Medicaid request is made, local agencies are required to distribute: Medicaid Eligibility and benefits brochure (PHC 10025) Addendum to the CAF (DWSW-2378-1) Change Report Form (HCF 10137) Notice of Assignment for Support (DES 2477) Good Cause Notice (DWSW 2018)

23. Medicaid Error Prevention and Identification: Recipient education When agencies consistently distribute required publications: Applicants and recipients are informed of their rights and responsibilities. As such, they are more likely to report timely and accurately. Agencies strengthen their position in fair hearings and fraud proceedings.

24. Medicaid Error Prevention and Identification: Recipient education DHFS is responsible for: Updating (and providing access to) recipient publications through EM page or BEM Forms process. Suggestions are welcome! Complete re-engineering of recipient notices

25. Recoverable Medicaid Overpayments All Medicaid client errors and only client Medicaid errors Agency and system errors are never recoverable. Examples of agency error include failure to act on reported information, math error , keying error, eligibility worker misinterpretation of policy, etc. A system error is defined as an eligibility error that occurred as result of misalignment between CARES and program policy.

26. Recoverable Medicaid Overpayments Before an overpayment claim is determined, a careful review all client attestations, agency records and program policy is essential. Give full consideration of change reporting, cost sharing and advanced notice policies. Review and gather all of the facts and relevant documentation. Medicaid definition of “Agency preventable client error” An applicant/recipient’s responsibility to accurately and timely report information which impacts eligibility is not supplanted by an agency’s ability to prevent the error.

27. Recoverable Medicaid Overpayments Statutory change July 27, 2005 (s. 49.497) Wisconsin has authority to recover costs associated with errors that result from an applicant/recipient failure to accurately and timely report any information that impacts Medicaid eligibility or cost sharing obligation. Expanded recovery authority to BadgerCare, MAPP, Well Woman and Family Planning Waiver

28. Overpayment Identification and Calculation Logic Review amount of actual Medicaid claims paid during time period in question (reference MMIS Overview guide on Eligibility Management Page). EDSNET/MMIS -- “RC” screen Review to/from dates of service and “paid” column. Dollars and cents (320357 means $3203.57) Paid claims include fee-for-service and managed care rates.

29. Overpayment Identification and Calculation Logic Medicaid “cascade” Non-financial Income Assets Full versus limited benefit Funding Source

30. Overpayment Identification and Calculation Logic Assess non-financial eligibility: State residency, Age, Citizenship/qualifying non-citizen status, Pregnancy, Disability, Parent or Caretaker Status Insurance coverage and access

31. Overpayment Identification and Calculation - Family Medicaid Assess income eligibility and cost sharing obligation: Determine highest appropriate FPL on cascade based on eligibility factors (MEH 8.1.6) Assess cost sharing impact for: BadgerCare premium obligation; Healthy Start Deductible; and Limited benefit subprograms such as FPW

32. Overpayment Identification and Calculation - Family Medicaid BadgerCare Premiums and Healthy Start Deductibles for children and pregnant women: Overpayment is lesser of calculated premium/deductible amount or actual paid claims. If recipient is determined ineligible, subtract any premium paid from the paid claims amount to determine overpayment. Limited benefit allowance (MEH 6.2.2.2.3.1) Family Planning Waiver (FPW) A separate application is not necessary.

33. Overpayment Identification and Calculation - EBD/LTC Medicaid If determined non-financially eligible, assess asset eligibility with consideration for: Spousal impoverishment MAPP Exempt assets such as home, burial, and vehicle Trusts and life estates Divestment

34. Overpayment Identification and Calculation - EBD/LTC Medicaid Assess potential impact on cost sharing amount as a result of income or expense discrepancies: SSI-Related deductible amounts Patient Liability (Institution) Cost Share (Community Waivers and FamilyCare) Monthly premium (MAPP)

35. Medicaid Overpayment Calculation: If it is determined that due to a “client error”, a recipient is ineligible for Medicaid or contributed an incorrect cost sharing amount, it is necessary to obtain the following information: Actual income and expense information to substantiate case circumstances, including relevant dates of change and report (as applicable) Amount of paid Medicaid claims for all relevant recipients

36. “Ineligible” overpayment claim If after thorough review, it is clear that a recipient was completely ineligible for any Medicaid subprogram, due to a client-caused error, the overpayment amount is equal to the entire amount of paid claims during the relevant time period (less any BadgerCare or MAPP premiums that were paid).

37. “Cost Sharing” Overpayment Claim If after thorough review, it is clear that a recipient contributed an incorrect amount toward his/her cost of care, due to a client-caused error, the overpayment amount is the lesser of cost sharing difference or amount of paid claims during each month in the relevant time period.

38. Claims Establishment Process Follow the instructions in Chapter VIII of the CARES Guide to enter the claim.  CARES issues a repayment agreement the first business day of the month following the date the claim was entered.   Local agencies are responsible to: Enter the claim into CARES. Send a manual Medicaid Overpayment Notice ( HCF 10093 ) indicating the reason for the overpayment and the period of ineligibility. Record the completed and signed repayment agreement on CARES screen BVPA within five days of receipt.   Record payments on CARES screen BVCP within five days of receipt. 

39. Claims Establishment Process DHFS will: Track the issuance of notices of non-payment and send automated dunning notices (i.e. past due notices). Refer past due claims for further collection action (i.e. tax intercept) to the Central Recoveries Enhanced System (CRES). Close the claim when the balance is paid.

40. Overpayment Calculation Examples(Handouts)

41. Future Savings Estimates The estimate of “Future Savings” is a product of the number of months remaining in the certification period, multiplied by the average monthly cost per person. DHFS will update the average monthly cost per person annually.

42. Future Savings Calculation Examples(Handouts)

43. Medicaid Benefit Recovery Estimates Estimates are provided for demonstration and inspirational purposes only. Assumptions: 3% Medicaid payment error rate 75% of errors are “client caused” 9-15% of all claims established are collected (tax intercept)

44. Increasing Payment Accuracy: Present DHFS Efforts: Medicaid Eligibility Quality Control (MEQC) Projects IRS/PARIS Project Payment Error Rate Measurement (PERM) Coming Soon: Benefit Recovery Training Basics and Advanced Targeted availability- early 2007

45. Increasing Collections: Present Local agencies Share best practices with DHFS and other agencies Simulation Tips Overpayment worksheets Use “contact us” on CARES Worker Web Explore opportunities to maximize efficiency: Specialization Consortiums

46. Medicaid Error Prevention and Identification: Error Prone Profiling Integrated Quality Assurance Tools (IQAT) Automation of Error Prone Profiling: Front-end verification tool that helps prevent errors before they occur. Various levels of error prone “flags” Workflow integration Targeted eligibility reviews Effective collection of outcome data Integration with fraud, fair hearings, IM complaints received by DHFS, etc.

47. Increasing Collections: Future Tax Intercept Implementation targeted for February 2007 Improved simulation functionality and review modules

48. Discussion and Questions