1Hancock Eliminating Waste, Fraud, and Abuse in Public Programs: Indiana’s Promising Practice National Academy for State Health Policy 24 th Annual State Health Policy Conference October 3-5, 2011 Kansas City, Missouri Emily F. Hancock, RPh, PharmD, MPA Office of Medicaid Policy and Planning

2Hancock Define the Problem

3Hancock The Problem Illustrated The U.S. spends more than $2 trillion on healthcare annually. At least 3 percent of that spending —or $68 billion —is lost to fraud each year. (National Health Care Anti-Fraud Association, 2008) Medicare and Medicaid made an estimated $23.7 billion in improper payments in These included $10.8 billion for Medicare and $12.9 billion for Medicaid. (U.S. Office of Management and Budget, 2008) Medicare paid dead physicians 478,500 claims totaling up to $92 million from 2000 to These claims included 16,548 to 18,240 deceased physicians. (U.S. Senate Permanent Committee on Investigations, 2008)

4Hancock Indiana’s Systematic Approach to Combating Improper Payments

5Hancock Current Program Integrity Efforts Recoveries & Avoidances SFY 11 ProgramDollars Third Party Liability $ 112,417,070 Estate Recovery $ 12,199,259 Pharmacy Audits $ 3,828,569 Surveillance and Utilization $ 2,341,263 Long Term Care $ 170,192 Total Program Integrity Efforts $ 130,956,353

6Hancock Prosecutions and Restitutions Member Fraud CY2010 –Bureau Of Investigations (BOI) substantiated 138 Medicaid Fraud Cases –24 cases were prosecuted –11 received felony convictions –Court ordered restitution totaling $24,554 Provider Fraud SFY11 –Medicaid Fraud Control Unit (MFCU) investigated 266 fraud referrals –Prosecuted 12 providers, 10 received Criminal Penalties –Recovered $36,098,607

7Hancock Expand program integrity efforts in Indiana Establish strong partnership with innovative Fraud and Abuse Detection System (FADS) contractor Leverage expertise with State staff working alongside contractor Combine technology, expert consulting and auditing services Develop new data mining processes Coordinate activities of agency stakeholders New Program Integrity Strategy

8Hancock Focus on Results Implement FADS on-time Improve financial return on investment  R ecoveries and cost avoidance Enhance provider relations Advance program integrity effectiveness

9Hancock Prevention: Provider Improper Payments Provider Enrollment –New enrollment processes and risk categories Provider Education –Educational seminars, bulletins, and newsletters National Correct Coding Initiative –More than 1.3 million new system edits in place Pre-payment Review –Validating claims before payment is made New ACA Regulations –Mandatory payment suspensions

10Hancock Prevention: Member Misrepresentation & Overutilization Eligibility data matches –Pre-enrollment and redetermination ACA eligibility data in 2014 –Access to federal databases to validate eligibility Member fraud hotline –For both members and providers Right Choices Program (RCP) –Controls members utilization

11Hancock Detection: Improper Payments Continual, rigorous data analysis and investigation –Primary focus on Medicaid claims data –Link data across multiple sources Use advanced data mining techniques and algorithms –DataProbe –J-SURS –Other Software Tools

12Hancock Reporting: Fraud and Abuse i-Sight Case Tracking System –Provides workflow-driven solution for documentation and tracking of provider and member fraud cases –Supports information sharing to ensure collaboration on cases –Allows for timely and accurate reporting of results for all Program Integrity activities

13Hancock Emphasis: Member Utilization How to manage resource access, cost and quality How to gain provider buy-in How to operate lock-in program One primary medical provider (PMP) One pharmacy One hospital (for non-emergency visits) How to evaluate return on investment

14Hancock Restricted Card Becomes Right Choices Program Regulatory Authority –Indiana Administrative Code, 405 IAC 1-1-2(c) Program Purpose –Identify members who use Medicaid services more extensively than peers –Implement restrictions for members who would benefit from increased care and coordination Restricted Card Program operated from 2000 until redesigned RCP launched in 2010

15Hancock What Changed?: DomainRight Choices Program PhilosophyInterventional Member Identification And Enrollment Electronic standards for utilization thresholds & scoring methodology. Member MaintenanceUniform policy manual Member ExitExit Review Summary with provider involvement Data Flow and System Integration Web interchange tool and reports Detecting and Reporting Misuse, Fraud, and Abuse Stakeholder involvement within creation of policy and procedure Program Evaluation MetricsNine formalized performance metrics

16Hancock Current Right Choices Program Enrollment Methodology 1.Overutilization of ER, # of PMP selections, # of Prescribers, # of Pharmacies 2.Overutilization of Controlled Substances together with multiple prescribers and pharmacies 3.Automatic placement due to suspected or alleged fraud or State guidelines for mental health drugs a)Five or more mental health drug claims in 45 days b)Benzodiazepines from three or more prescribers in 90 days

17Hancock RCP Program Ramp-up

18Hancock Priority Screening and Assessment Members with Utilization at 3 rd Standard Deviation of the Mean –Primary Medical Provider (PMP) selections –Emergency Room visits –Prescribers –Pharmacies Prioritize Screening and Assessmen t –Members with xs ER utilization plus 3 other parameters –Members with xs ER utilization plus 2 other parameters –Members with xs ER utilization plus 1 other parameter

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23Hancock Why is the RCP Important in Managed Care Environments? Focuses coordinated care Encourages medical home concept Leverages case management impact Reduces waste, fraud, and abuse –Total amount paid - ↓$ pmpm –Amount paid - ER visits - ↓44% –Amount paid - physician office visits – ↓48% –Pharmacy claim count – ↓2%

24Hancock Future Considerations –Automated review of Medicaid application data –Automated pre-payment review of claims –Emerging technology application –Right Choices Program expansion –Consequences for Medicaid program violation

25Hancock Conclusion Thank you for your interest