Health officials describe fraud-detection upgrades, say most errors are administrative
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Summary
The Department of Health detailed program-integrity operations, investigations, provider outreach and a newly purchased fraud-detection system that uses a library of analytic models to flag outliers for review.
Department officials told the appropriations subcommittee how the state identifies improper Medicaid payments and pursues recoveries while emphasizing front-end controls and provider education.
"We have our own internal program integrity section, and they work on identifying any payment irregularities," Jesse Springer said, describing audits, data mining, provider self-audits and referrals. Springer told the committee the department sometimes asks providers to perform self-audits when errors look unintentional.
Director Stefan Johansen described the referral path for suspected criminal fraud: when program-integrity staff conclude a crime may have occurred they refer cases to the Medicaid Fraud Control Unit in the attorney general's office and to federal partners such as the HHS Office of Inspector General and, in some cases, the FBI. Johansen also noted the state returns the federal share of recovered funds and then pursues recoupment. "We return their share. Usually, it's 50%," Johansen said.
Andrew Chapin, who oversees the program-integrity unit, described a new fraud, waste and abuse (FWA) detection and case-management tool the department recently installed. "We have a library of about a 100 different models that the user can select from, which then gives you a kind of a ranking order of...providers and their practices," Chapin said. The system vendor named in the presentation was Olivia Analytics.
Officials emphasized that detecting anomalies quickly and strengthening enrollment and prior-authorization controls reduce large downstream recoveries. The department said its internal eligibility-review unit audits the work of centralized eligibility staff to find and fix errors before they surface in federal reviews.
Ending: Committee members asked whether the department acts quickly on early irregularities rather than waiting for long audits. Officials said modernized data tools and monthly screening of provider enrollment flags allow the department to place providers on review or require additional documentation as soon as trends appear.
