Readying for Another Round of Audits
Readying for Another Round of Audits | Medicaid Integrity Program, MIP, Medicaid Integrity Contractors, MICs, federal audits, CMS, Health Integrity, Tennessee Hospital Association, Bass, Berry & Sims, Gwyn Walters, Anna Grizzle

Medicaid Integrity Program Audits Coming Soon to Tennessee

Just when you thought you were beginning to get a handle on RAC ... here comes MIP, ZPIC and OIG. More than just another round of the federal government’s favorite game of “Guess the Acronym,” these particular letters could spell big trouble for providers across the nation.
Like the Recovery Audit Contractor program, MIP, ZPIC and OIG are audits originating from various federal agencies. One of the next big waves expected to hit Tennessee is MIP — the Medicaid Integrity Program, but providers should also be aware of Zone Program Integrity Contractor (ZPIC) audits and Office of Inspector General (OIG) self audits.
“The Medicaid Integrity Program was established by legislation in the Deficit Reduction Act of 2005,” explained Gwyn Walters, vice president for Research Reimbursement with the Tennessee Hospital Association (THA). Since Medicaid was launched in the 1960s, “it’s the first time the federal government has been directly involved in auditing state programs … so this is a sea change,” she said.

Background & Structure

Anna Grizzle — a member in the healthcare practice area at Bass, Berry & Sims, PLC, which has offices across Tennessee — said significant concern existed on a federal level of overpayment, fraud and abuse in Medicaid reimbursements. The concern resulted in the 2005 Congressional mandate and was backed by significantly increased resources to the Centers for Medicare & Medicaid Services (CMS) to conduct audits.
In the Sept. 1, 2008 issue of Health Care Auditing Strategies, former Texas Medicaid Inspector General Brian Flood stated that with an 18.5 percent error rate, Medicaid loses more money than any other federal program. Although MIP is meant to do for Medicaid what RAC is doing for Medicare, there are a number of key differences.
“RAC — it’s a very transparent program. Information is easy to get. Information about MIP has not been easily available,” Walters said. She continued, “The RAC program is supposed to identify overpayment and underpayments. The MIP is only to identify overpayments — so that obviously is not good for providers.” Walters also pointed out the RAC program began with a demonstration project in several states and used the experience to address issues that cropped up. “With MIP, there’s been no demonstration program.” Furthermore, she noted, because of the federal/state nature of the MIP audits, there is a distinct lack of national parameters.
“These two programs are very similar in their goals, but they’re completely different in their structure and process,” Walters said.
What is crystal clear, however, is that CMS believes there is money that has been sent to states that should be returned to the agency. Walters said CMS has estimated they will recover more money from the MIP program than from RAC, which she calls “mind boggling” in light of the fact the Medicaid program is so much smaller than Medicare and reimbursement for services is significantly less.
Grizzle said the MIP program has been rolling out over the last few years with audits already underway in several states. Tennessee, which is part of regions three and four with a field office in Atlanta, is one of the last to go live. “According to CMS,” she said, “the audits are to begin on or around June of this year.” Therefore, the time to get prepared is now.
Within the Medicaid Integrity Group, Grizzle explained, there are three divisions under the umbrella of the Office of the Group Director. The Division of Fraud Research and Detection is responsible for data mining and looking for fraudulent trends or overpayment patterns. The Division of Field Operations includes approximately 40 field operatives around the country who are conducting state MIP reviews and providing technical assistance and training.
Grizzle continued, the Division of Medicaid Integrity Contracting oversees the procurement of MIC contracts and oversees the three types of MICs — Education, Review of Provider and Audit. The Education MICs are responsible for providing training materials to providers. Review of Provider MICs comb through provider claims to identify high-risk areas, said Grizzle. “They will do this through proactive data claims analysis.” Audit MICs, she added, are the ones actually conducting post-payment site audits.
“Any provider that receives payment from Medicaid is subject to a MIP audit,” she stressed. “The goal of these Audit MICs,” she continued, “is to enhance the Medicaid integrity efforts of the states … not to duplicate the state efforts. The net result is you’re going to see more Medicaid audits.”
Of special note for Tennessee, the Audit MIC changed in September 2009. Originally, it was Booz Allen Hamilton but is now Health Integrity, LLC.

Preparation & Fall Out

Walters said the federal/state nature of the audits has led CMS to seemingly defer to states when it comes to establishing certain program parameters, such as record limits and “look back” rules. To that end, THA is working with state legislators to try to create limits and boundaries that mirror the national RAC parameters. Walters said the goal was to create an objective system that is closely linked to what CMS has already approved (for RAC) and is easy for providers to understand.
Even if Tennessee is successful in creating a program that meets CMS approval, that doesn’t mean providers will have true clarity since audit rules vary state by state. “In Tennessee, because we border on eight states, we have hospitals that serve Medicaid enrollees in multiple states so the lack of national standards and national protocols will add to the administrative burden,” said Walters. “This is a particularly stressful issue in Tennessee. We continue to push for national standards.”
Since there are now numerous federal audit programs … all with different rules and timelines … that can occur simultaneously, both Grizzle and Walters said it is imperative that providers name an audit point person who quarterbacks the process and also create a multidisciplinary audit committee.
“The actual MIC audit request will go to the person who is listed as the point person with the state Medicaid office so providers need to check who they have listed as a point of contact,” explained Grizzle. She added it’s a step that is easy to forget but one that could be very costly if the very tight deadlines are missed while an audit letter bounces from desk to desk. Also, Grizzle noted, correspondence could come on state, CMS, Medicaid, or Health Integrity letterhead.
Walters and Grizzle agreed providers should take several other key steps to prepare for any and all audits. First, a strong compliance program should include a Medicaid component in addition to Medicare. Second, providers should be mining their own data and conducting internal audits. Effective tracking tools are essential to keep up with each type of audit’s specific parameters and timelines. Only one designated person should submit records and that person should verify the records are complete.
Grizzle also suggested providers consider involving legal counsel from the beginning of the process. While the RAC demonstration program didn’t lead to a single referral to law enforcement agents, the potential is higher with MIP. Grizzle pointed out the MIP program has a stated goal to search for Medicaid fraud. Walters said while it is generally advisable to have legal counsel involved, the THA anticipates audits will mostly uncover billing errors rather than intentional fraud.
Just as the audit rules vary by state, so, too, does the aftermath of a ruling. “If the provider is unhappy with the result, the appeals process is governed by state law,” said Grizzle.
What does hold true nationally is that the provider, state and CMS have the opportunity to comment on the report once it is issued by the MIC. Once final, Grizzle said, “Under federal law, the state must return the federal share of the overpayment to CMS within 60 calendar days regardless of whether or not the state actually seeks to recover the overpayment from the provider.”
The allotted timeframe doesn’t take into account any appeal of the decision. Given current budget constraints, it is being presumed the state will move quickly to recover monetary losses.
“We’re very concerned about having an objective and fair appeals process in place,” said Walters, “but we understand the financial pressures put on the state. It really does put the state at a disadvantage.”

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