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Kansas Medicaid inspector general flags billing, background-check gaps and school Medicaid audit savings
Summary
The Office of the Medicaid Inspector General reported investigations into nursing home fraud, a school Medicaid audit that could save an estimated $22.5 million annually, and systemic compliance gaps including missing background checks and impossible-hours billing.
Steve Anderson, Kansas Medicaid Inspector General, told the Bethel committee his office processed 1,454 complaints in calendar year 2024 and that 1,318 of those involved allegations of beneficiary eligibility fraud. He said the OIG has already processed more than 400 complaints so far in the current year and has filed 36 civil complaints related to what the office alleges were false bed-tax statements by certain nursing homes.
Anderson described a performance audit of Medicaid reimbursements tied to school-based services covering claims from Jan. 1, 2021, through Jan. 31, 2023. The audit found that Medicaid’s monthly capitation payments to managed care organizations may overlap with fee-for-service payments for medically necessary school services, and moving those services under MCO capitation could produce an estimated statewide savings of about $22.5 million per year, Anderson said. The audit also identified a recurring problem in which local education agencies used invalid provider NPI numbers on claims; one LEA received $390,542 using an NPI assigned to a former business director who had no medical affiliation.
On provider compliance, Anderson said the audit found that 72 of 231 school-based providers (31 percent) had no evidence of required background checks on file at the time of the OIG review; five of the schools performed background checks only after the audit team requested records. He added that only 10 of 231 practitioners’ files contained searches for Medicare/Medicaid exclusion lists, producing a 96 percent noncompliance rate on that simple check.
Anderson also described open investigations into “impossible hours” billing: providers billing more than 168 hours in a week or averaging eight to 24 billed hours per day. He said a review of credentials for providers with excessive billed hours found expired or missing licenses in several cases. The OIG identified providers who billed more than $7 million and were paid roughly $3.5 million for claims that appear invalid because of licensure issues or materially implausible hours, Anderson told legislators.
The IG said the OIG is expanding staff capacity — the office received a budget enhancement to add three Medicaid-focused investigators — and is seeking statutory changes to expand audit authority into cash and food assistance programs. Anderson told the committee the OIG will follow up on past recommendations and provide better tracking of audit responses so the legislature can monitor implementation.
Ending: Committee members asked how the findings move from audit to enforcement. Anderson said criminal or civil referrals go to appropriate law-enforcement or prosecutorial offices and that the OIG will improve its reporting and follow-up in annual reports to include pending implementation and enforcement status for tracked recommendations.
