The National Association of Insurance Commissioners (NAIC) and the U.S. Department of Health and Human Services (HHS) are working to develop new antifraud measures required by the Patient Protection and Affordable Care Act of 2010 (PPACA).

Medicaid Program Integrity Background

The 2005 Deficit Reduction Act (DRA) established the Medicaid Integrity Program at section 1936 of the Act. The Act increased federal resources to help CMS in its efforts to prevent, detect, and reduce fraud, waste, and abuse in the $300 billion per year Medicaid program.

Specifically, section 1936 of the Act provided CMS with resources to establish the Medicaid Integrity Program, CMS’ first national strategy to detect and prevent Medicaid fraud and abuse.ntifraud Task Force at the NAIC, Kansas City, Mo., took up the topic earlier this month during a teleconference scheduled to replace an NAIC summer meeting session that was canceled due to Hurricane Irene.

Fraud wastes at least 3% of all health care spending each year and may waste as much as 10%, according to the National Health Care Anti-Fraud Association (NHCAA), Washington.

The Medicaid Program Integrity initiative within the DRA targeted federal anxiety over poor anti-fraud efforts by the states that lacked consistency, fortitude, and most importantly, funding. Various studies by the OIG (Office of the Inspector General for HHS) and the General Accounting Office have noted the high level of compliance risk in the Medicaid program and bemoaned the lack of consistent enforcement efforts by the states, cross-fertilization of best investigatory practices, and cooperation in joint investigations.

In advance of the DRA various techniques had been used to try and entice the states into more active efforts to combat Medicaid fraud and these include federal incentives and funding as well as humiliation in the form of audit findings and bad publicity about wasting the taxpayer's dollars through lax oversight.

For example, bad publicity about Medicaid fraud in New York State led to a bipartisan agreement about the need for a state OIG reporting directly to the governor.

Recently HHS Secretary Kathleen Sebelius asked the task force to develop a model uniform reporting form and recommend uniform reporting standards insurers can use to report fraud and abuse to state insurance departments or other agencies.

Even though the task force convened later than it expected, it is still waiting for gudance from HHS's Centers for Medicare and Medicaid Services (CMS), industry and government sources said.

The NAIC already has a well-developed Online Fraud Reporting System. The system went live in September 2005, and a great majority of states and territories now use it.

Ted Clark, the Kansas Insurance Department's antifraud director and head of the NAIC's Antifraud Task Force, said he thinks HHS-NAIC collaboration will happen under a new group.

Clark anticipates a new NAIC working group to be created just for this HHS-NAIC uniform fraud reporting form and standards effort.

He said there are three options on the table: Starting over, modifying or tweaking the existing form, or using the current form.

"We will get input and guidance from CMS to make sure the format is useful for the public payers' side and the private payers' side," Clark said. He said he is "very hopeful that in the end the result will be a public-private partnership in fighting health care fraud," but that it "will take some time."

Possible Amti-Fraud Updates

HHS and NAIC understand the savings possible in advancing Medicaid anti-fraud measures. They also realize that many states are faced with budget crises and will likely not expend funds on fraud mesaures that mey or may not yield savings. Perhaps incentives that provide states with a portion of funds saved would result in increased focus on fraud? Or perhaps Medicaid contracted health plan incentives could also yield an increased anti-fraud effort and accompanying savings. For that matter, provider and Medicaid enrollee incentives may be tried as well. Whatever the new rules entail, increased focus on Medicaid fraud is essential.