Medicaid Intensifies Waste, Fraud and Abuse Detection Effort through New Contract
Governor Steve Beshear today announced the hiring of a company to serve as a watchdog to detect waste, fraud and abuse and protect the stateâ??s Medicaid program.
FRANKFORT, Ky. (October 19, 2010) –
Governor Steve Beshear today announced the hiring of a company to serve as a watchdog to detect waste, fraud and abuse and protect the state’s Medicaid program.
Kentucky executed a contract with Ingenix, a Minnesota-based company, on Oct. 4 to use the latest computer technology available to review medical claims from Kentucky Medicaid providers to stop waste and detect fraud and abuse. Its program integrity services will include running algorithms, mathematical formulas designed to detect abusive practices; conducting onsite audits, desk audits and pre-payment reviews; and recovering overpayments. Ingenix also has been charged with identifying policy and system issues and making recommendations for improvement, as well as keeping the Department for Medicaid Services apprised of any changes in federal regulations.
“In a program the size of Kentucky’s Medicaid program, which continues to grow both in costs and people served, having the most vigilant waste, fraud and abuse detection system in place is critical,” said Gov. Beshear. “This contract represents a multi-faceted and technologically sophisticated approach to detecting and remedying any unnecessary expenditures, and that is good news for Kentucky taxpayers.”
Rather than a fixed amount, the three-year, contingency fee-based contract means the amount paid to the company will be based on the amount of Medicaid overpayments recovered. Under the contract, Ingenix will be paid 12.5 percent of the amount it recoups, with the state and federal governments sharing in the remainder of the recoupment.
Awarded through a competitive procurement process initiated earlier this year, the contract is part of several Medicaid cost containment initiatives announced in July, all designed to curb costs in the growing program. It’s estimated the new system will identify $27 million per year in excess spending.
“Every dollar is critical to the Medicaid program, and, through this contract, Kentucky will have the most aggressive methods and resources available anywhere in the country to ensure dollars are spent as wisely as possible,” said Cabinet for Health and Family Services Secretary Janie Miller. “This contract brings to Medicaid an independent watchdog with the specialized knowledge and expertise to root out waste and fraud by both providers and recipients. The contract is structured to incentivize positive results.”
Ingenix has Medicaid program integrity contracts with several states, including Washington, Alabama and Iowa.
“Kentucky has shown national leadership with its decision to undertake this aggressive program integrity effort,” said Shelby Solomon, Ingenix executive vice president of government solutions. “Ingenix is proud to work with Kentucky to help this critical program run as efficiently as possible.”
Kentucky’s Medicaid program, one of the state’s largest health programs, has annual expenditures of approximately $6 billion and provides medically necessary care to more than 800,000 Kentuckians.
Source: Ingenix
