OIG: Medicaid isn't properly detecting fraud

A report from the Office of Inspector General (OIG) for Evaluation and Inspections for the Centers for Medicare & Medicaid Services (CMS) and State Operations indicates that the Medicaid Statistical Information System (MSIS) was unable to capture many data elements that can assist in fraud, waste and abuse detection between 2004 and 2006.

In addition to being unable to capture those data elements, MSIS during that time took an average of more than 18 months--after initial state data submission--before CMS released them to the public. According the report, this included an average of six months that states took to submit the MSIS files in a CMS-acceptable format and averages of four and nine months for CMS to validate and release the files to the public.

MSIS failed to capture 46 percent of the consolidated data elements reviewed by the OIG that can be identified as useful for fraud, waste and abuse detection.

Also, those data were missing in all four categories OIG developed for its review:

• Service provider identifiers;
• Procedure, produce and service descriptions;
• Billing information; and
• Beneficiary and eligibility information.

According to the report, MSIS did not capture more than half of the consolidated Medicaid service provider identifier data elements reviewed. If that information is missing, fraud analysts can’t use MSIS data to assess whether a qualified physician submitted a medical procedure, product or service.

In addition, MSIS failed to capture 48 percent of the Medicaid procedure, product and service description data elements reviewed--the kind of information necessary to determine whether duplicate or medically unnecessary procedures had been performed.

MSIS also failed to capture over one-third of the consolidated billing information data reviewed. Without details regarding fees paid, fraud analysts cannot use MSIS data to assess whether the total amounts claimed and reimbursed contain appropriate fees. Finally, MSIS did not capture more than one-third of the consolidated Medicaid beneficiary and eligibility information data elements reviewed.

The report concluded that the states and CMS should be able to reduce the timeframes for file submission (states) and validation (CMS). Based on the findings, CMS, the OIG found, should also improve the documentation and disclosure of error tolerance adjustments and expand current state Medicaid data collection and reporting to further assist in fraud, waste and abuse detection.