The Case for Program Integrity in Medicaid Managed Care | Part Nine
In our previous post on subcontractors, we talked about the nuanced aspects of managing PI and addressing FWA within the realm of managed care organizations (MCOs) and their subcontractors and related entities. Here, the Benefit/Program Integrity (PI) team provides a case study based on an engagement that demonstrates the complexity around PI within MCOs when subcontractors are present.
Key Takeaways
This blog post highlights the challenges and complexities involved in ensuring Program Integrity (PI) within Managed Care Organizations (MCOs) and their subcontractors, using a case study to examine the consequences of inadequate oversight. The findings reveal a lack of transparency, weak PI practices, and insufficient measures to prevent fraud, waste, and abuse (FWA), underscoring the need for robust contractual requirements, data analytics, and accountability mechanisms.
A Real-World Example from One of Our Own Engagements
Consider our work with one state client having an MCO leveraging subcontractors. The State engaged us to provide technical assistance to review subcontractor policies and procedures, contracts, systems, and staff, so that we could confirm their subcontractors met the state’s contractual oversight requirements.
Our Process
The activities below comprise a portion of our oversight processes.
Our Findings
In our work with this State over a two-year period, we discovered a significant lack of PI oversight of subcontractors by MCOs, highlighted by unclear lines of responsibility. A few subcontractors were further delegating their PI duties to outside entities without informing the MCO. This lack of transparency and the absence of clearly defined responsibilities and reporting processes caused confusion about the necessary actions required from subcontractors, the MCO, and the Medicaid agency to ensure proper PI and oversight measures.
We also found the subcontractors were NOT performing pre-payment reviews other than required system reviews, and we discovered low-volume and limited-impact FWA investigations. Considering the high number of member claims, the low number of productive investigations was concerning, especially the investigations seldom identified FWA and almost never generated recoveries.
This example clearly demonstrates the difficulty in nested layers of undefined and unclear work functions that can result in weak PI and potential provider FWA. Without reliable insight into activities performed at every level by each entity – and how those activities correlate to contract requirements for expected benchmarks and outcomes – the lack of transparency needed for state oversight can lead to scenarios similar to our example above.
Recommendations
Addressing the multi-faceted layers of PI oversight of MCOs and their subcontractors is challenging but necessary. It is essential to establish PI protocols and methodologies so that MCOs and their subcontractors are responsible, accountable, and practicing proper stewardship of taxpayer dollars, which ensures that dollars given are spent on patient care instead of being spent wastefully. We recommend the following:
Stay tuned for the next post in our series, in which we turn to Claims Denials, how FWA can show up in this dimension of managed care, and what states can do about it.
Case Study: Delegated Vendors Without Proper Oversight
Recent reports are shining a strong light on issues at the forefront of government health and human-services programs, namely the depth and breadth of fraud, waste, and abuse (FWA) within the managed care environment – and need to address it with program integrity (PI) oversight.
These reports, from a range of outlets including a report from the New York Times, are exposing high-profile, high-dollar accounts of FWA driven by lack of PI oversight of MCO’s providers, including their delegates, such as pharmacy benefit managers (PBMs).
Reports of similar investigations and ensuing settlements against Centene echoed around the country, including a $166 million settlement in Texas, a $215 million settlement in California, a settlement in Ohio for $88 million,
In 42 CFR 438.608, the verbiage says “the MCO, PIHP, or PAHP, or subcontractor to the extent that the subcontractor is delegated responsibility by the MCO, PIHP, or PAHP for coverage of services and payment of claims under the contract between the State and the MCO, PIHP, or PAHP, implement and maintain arrangements or procedures that are designed to detect and prevent fraud, waste, and abuse.” According to the Texas article, there are allegations that Centene’s PBM “overbilled their Medicaid programs for prescription drugs and pharmacy services”. Which begs the question: Were there procedures in place designed (or performed) to detect and prevent FWA?
This failure to oversee vendors serves as a cautionary tale and an example of what can happen within the MCO environment when PI is either weak, not enforced, or missing altogether – a costly problem that compromised patient care across numerous markets.
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Our Benefit/Program Integrity program area covers a range of services, disciplines, and areas of focus, including data analytics, and health plan oversight and compliance, which takes direct aim at oversight of MCOs. We are here to answer any questions and help with any health care and human services needs your agency may encounter. Contact a member of our team today.
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Ryan Farrell, CFE
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Email: rfarrell@mslc.com
Phone Number: 512-342-0800
Emily Wale, CPA, CFE
Member
Email: ewale@mslc.com
Phone Number: 317-815-5466