State of Iowa Medicaid Agency Selects Ingenix for Comprehensive Payment Accuracy Initiative

Ingenix Will Manage Program Integrity Effort, Including Fraud-and-Abuse Detection, for $3 Billion Medicaid Program Program Integrity Effort Expected to Yield More Than $20 Million Annually in Combined Recoveries, Cost Avoidance

DES MOINES, Iowa & EDEN PRAIRIE, Minn. (September 29, 2010) –

The Iowa Medicaid Enterprise (IME), a unique combination of State employees and commercial vendors responsible for managing Iowa’s $3 billion Medicaid program, has chosen Ingenix to manage its Program Integrity initiative to help ensure that taxpayer dollars are properly spent.

IME has awarded Ingenix a 3-year contract to implement a program integrity effort that Ingenix and the State expect to yield more than $20 million annually in recoveries and cost avoidance through identification of fraud, abuse, errors and other inappropriate payments. The contract may be extended if the State is satisfied with Ingenix’s performance.

Iowa’s Medicaid program covers nearly 450,000 beneficiaries and 38,000 care providers, and is ranked among the nation’s most accurate systems by the Centers for Medicare & Medicaid Services (CMS). In a recent Payment Error Rate Measurement (PERM) audit – which measures overpayments to Medicaid care providers and errors in calculating beneficiary eligibility – Iowa’s error rate was approximately half the national average. IME expects its agreement with Ingenix will further strengthen Iowa’s Medicaid program integrity efforts.

“One of the keys to IME’s success is finding outside partners with the right specialties, capabilities and expertise for Iowa,” said Jennifer Vermeer, Iowa Medicaid director. “Ingenix has a demonstrable track record for delivering results to state Medicaid program integrity efforts, and the company’s widespread program integrity experience will help Iowa continue its national leadership.”

Under terms of the agreement, Ingenix will provide a broad range of products, services, detection algorithms, data mining and extraction tools, consulting expertise, and program management capabilities to IME, and will manage the bulk of IME’s Program Integrity efforts, including:

Surveillance and utilization review services (SURS), which use data analytics to detect aberrant trends, outliers and unusual billing patterns that may indicate fraud, waste and abuse. For example, by conducting provider peer group comparisons – analyzing and comparing providers to their respective peer groups – analysts can determine abnormal patterns of practice or billing.
IME’s Medical Value Management (MVM) program, which compares nationally recognized benchmarks on how services are utilized by beneficiaries, what gaps in care may exist in the Medicaid program, and how to improve costs and services throughout the program
Credit balance audits to determine whether providers of Medicaid services have been overpaid. The Federal Medical Assistance Percentage (FMAP) specifies the percentage of each provider’s claims – for example, from a nursing home – to be reimbursed from federal funds (commonly called the federal share). Credit balances occur when the federal reimbursement that a care provider receives for services provided to a Medicaid beneficiary exceeds the charges; for example, when a nursing home bills Medicaid for more days than a patient was at the facility.
Medical necessity reviews to determine whether services provided to Medicaid beneficiaries are appropriate (based on scientific evidence, professional standards and expert opinion) to improve outcomes, and consistent with generally accepted principles of medical practice
Advanced analytics to identify overpayments, which stress up-front cost avoidance to reduce overpayments (based on information learned from previous post-payment reviews), working across the IME enterprise to achieve maximum savings, and educating providers to reduce billing mistakes early in the process. Iowa and Ingenix will also evaluate implementing a prospective claims review process, designed to identify and stop payment on questionable claims before money is paid out.

Patti Ernst Becker, IME program integrity director, said: “We are particularly excited about the data mining and data extraction tools Ingenix is bringing to the IME. We believe this will put our program integrity effort on the leading edge in both detecting and avoiding Medicaid overpayments.”

“We look forward to working with IME to help this well-run program achieve even better efficiencies so that Medicaid resources are used to provide the best possible care to Iowa residents,” said Shelby Solomon, Ingenix executive vice president, commercial and government health plan solutions. “We are proud that Iowa has selected Ingenix to manage its Program Integrity initiative.”

Ingenix provides focused payment accuracy solutions and services for several other state Medicaid agencies including Washington and Alabama, and provides other states such as Michigan, California, Illinois and New Jersey with Medicaid data warehouse solutions and advanced analytics support that state analysts apply to their program integrity efforts. Ingenix has helped Medicaid and Health and Human Services agencies identify and recover hundreds of millions of dollars in overpayments due to fraud, waste, errors and abuse.

About Iowa Medicaid Enterprise (IME)

The Iowa Medicaid Enterprise (IME) is an endeavor that unites State Staff and “best of breed” contractors into a performance-based model for administration of the Medicaid program. Medicaid is a state-federal funded program that is administered by the State of Iowa Department of Human Services.

Source: Ingenix