Introducing OAD’s Auditor Alerts

If you follow local news, you’ve probably seen mentions of (or perhaps even read) our office’s first Auditor Alert, which was released on May 17, 2017.

The Auditor Alert, The Oregon Health Authority May Be Providing Medicaid Benefits to Ineligible Recipients, discussed substantive risks related to Medicaid eligibility determination.  This flexible reporting tool supports the Division’s goal of promoting transparency and accountability to improve Oregon government. Alerts provide decision makers with critical information so they can take action to address substantive issues in a timely manner. Alerts are also aligned with the Division’s citizen-centric reporting philosophy in that they apprise the public of critical matters in a timely fashion.

Here’s how Alerts work: our auditors occasionally uncover information during an agency audit that requires an immediate course correction and is considered too urgent to be delayed until an audit’s completion. In other instances, as in the case of the Medicaid Alert, the Division is apprised of an issue that is not within the scope of any current audit activity. In these instances, the Secretary of State may issue an Auditor Alert describing the finding, its importance, as well as give the agency and the legislature recommendations for immediate action. These Alerts are issued in a manner that is fully compliant with Government Auditing Standards.

The Division will continue working every day to ensure that state government is functioning to benefit all Oregonians. We will continue to use flexible tools and innovative reporting practices, such as Auditor Alerts, to accomplish this goal.

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Audit Release: Automated Medicaid eligibility is processed appropriately at OHA, yet manual input accuracy and eligibility override monitoring need improvement

AUDIT PURPOSE

In Oregon, over one million individuals have Medicaid coverage. Medicaid expenditures totaled $9.3 billion in fiscal year 2016, including $1.2 billion in state general funds. We conducted this audit to determine if two critical automated computer programs managed by the Oregon Health Authority accurately verify Medicaid client eligibility and accurately issue payments to healthcare providers. If these programs do not function properly, clients may inappropriately receive, or be denied, Medicaid benefits.

FINDINGS IMPACT

Manual input errors and lack of monitoring of overrides can cause inappropriate eligibility determinations and payments to providers. If agency leadership implements more effective monitoring of caseworker eligibility overrides and improves manual input accuracy, the state will better comply with eligibility requirements and increase accuracy of payments. Inaction will allow overrides and manual input errors to continue causing inappropriate payments to providers.

Read full report here.

KEY FINDINGS

  • Two critical automated computer programs appropriately determined eligibility, enrolled Medicaid clients in coordinated care organizations, and made appropriate payments to those organizations based on eligibility information received.
  • Automated computer processes appropriately validated the Social Security number and citizenship status of applicants over 99.7% of the time in our review of over 425,000 records.
  • We reviewed 30 eligibility determinations and found seven (23%) had manual input errors. While only one error resulted in a client being determined eligible when they were not, each of the errors related to application information that could have resulted in inappropriate eligibility determinations.
  • Although their volume has significantly decreased over time, overrides of eligibility are not sufficiently monitored, meaning unauthorized overrides of Medicaid eligibility could occur.
  • Our review of 72 overridden eligibility segments showed caseworkers did not take proper action to clear 25 (35%). Overridden segments are not subject to automated processes that redetermine eligibility for certain clients.
  • Our 2011 audit recommendations to OHA and DHS concerning access to the Medicaid Management Information System have not been fully implemented, increasing security risk.

RECOMMENDATIONS SUMMARY

  • OHA should continue efforts to improve caseworker manual input accuracy through additional training, and implement a review process for input where errors negatively affect eligibility determination.
  • OHA managers should monitor eligibility overrides to prevent unauthorized validation and ensure state resources are spent appropriately.
  • OHA and DHS should fully implement our 2011 audit logical access recommendations.
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GAO RePodcast: Health Care Fraud Schemes

How do you find—and stop—fraudsters among Medicare and Medicaid’s 100 million beneficiaries, countless providers, and more than $1 trillion in annual spending? It helps to know what you’re looking for…

Kathleen King, Director of the GAO Health Team, shares her team’s findings in the GAO podcast. Generally, the majority of cases included more than one health care fraud scheme – some of the cases had five or more schemes. The most common  schemes were related to billing fraud, such as billing for services that had not been provided. Health care providers were involved in the majority of cases.

The GAO also looked at whether or not the use of smart cards could have affected the number of cases. Due to provider complicity in the fraud schemes, however, it was determined that the use of smart cards would not have had a significant effect.

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Listen to the podcast below:

Read the report here.

Or, to visit the GAO WatchBlog and listen in, follow this link: Health Care Fraud Schemes (podcast)

 

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Internal Auditor Magazine Reblog: Shuttered by Audit Findings

A consulting group and state attorney general’s office reached very different conclusions regarding the potential misuse of Medicaid funds by several nonprofit agencies in New Mexico.

Findings from independent audits have resulted in the closure of 15 New Mexico-based nonprofit agencies that provided behavioral health services in that state, according to Nonprofit Quarterly… However, the New Mexico attorney general’s office has disposed of most of the cases and announced that it did not find a pattern of fraud in 10 nonprofits that had been part of PCG’s audits.

So what happened, and who is in the right? According to Art Stewart, two process steps crucial to the accurate completion of the audit were not followed through, which lead to the consulting group erroneously concluding that Medicaid funds were being misused.

The most telling issues arose during the later stages of the audit:

PCG (Public Consulting Group) and HSD (Human Services Division) did not share the audit’s findings with any of the 15 organizations whose Medicaid payments HSD froze. It also is unclear whether HSD did a systematic check itself to make sure claims that were flagged weren’t mistakenly identified as inappropriate. It is critical that auditors present findings to staff of audited organizations to give them an opportunity to refute findings or address misunderstandings. The damage that can be caused by a failure to do so is evident in this story.

This is a good reminder for all of us here in Audit Land to hew to the process and avoid the temptation of shortcuts. For better or (in this case) for worse, our work has real world consequences.

Want to know more? Check the article out here, or check out all that Ia Magazine has to offer here. Interested in checking out the original audit? Click here.

 

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