Health Authority Still Has Work To Do To Fight Fraud And Waste

The Oregon Health Authority is still working on tightening its oversight to ensure that it doesn’t again overpay Medicaid insurers by millions of dollars.

A report released Wednesday by the Oregon Secretary of State’s office details steps the health authority has taken in response to a November 2017 audit that found that the state had paid coordinated care organizations for clients that shouldn’t have received Medicaid benefits. That audit also found the state essentially wasted $88 million by not processing Medicaid applicants fast enough.

The health authority overpaid the insurers by more than $40 million between 2014 and early 2017. It recouped that money by last December, said Robb Cowie, the agency’s communications director. He said the state has repaid federal authorities $47 million for overpayments to the state, costing taxpayers about $6 million.

And the underlying issues are still not resolved.

The 2017 audit made eight recommendations, which the health authority approved. Wednesday's status report noted the health authority has improved processes that led to the overpayments by partially implementing six recommendations and completing or resolving the other two.

Specifically, it said the agency has adopted a monthly monitoring system to pinpoint any eligibility issues and resolved another area involving working with federal health officials. The agency also has developed controls for its Medicaid management system, revised contracts for coordinated care organizations, hired an outside consultant to review claims data and taken other steps recommended by the 2017 audit. But it did not take advantage of free, sophisticated data mining techniques available from the federal government to detect improper payments, the report says.

Though months have passed, the agency still has more work to do like adopting more controls to prevent overpayment and training staff, the report said.

Oregon Health Authority spokesman Robb Cowie said in an email that the Medicaid system is complicated, different tasks involve various timelines and that the agency is hampered in some areas by factors out of its control.

“OHA is focused on strengthening our ability to prevent, detect and recover Medicaid overpayments by implementing the Secretary of State’s recommendations, as well as taking other steps to reduce improper payments, such as increasing CCO accountability in new contracts that will take effect in 2020,” Cowie said. “We appreciate the Secretary of State’s recognition of the progress we’ve made.”

He said the agency:

  • Is testing 1,500 controls in its Medicaid management system on a rolling basis when staff have time;
  • Completed more than 320 audits of Medicaid providers and insurers between July 2017 and July 2018;
  • Improved oversight and accountability in 2019 contracts with coordinated care organizations to prevent fraud, waste and abuse;
  • Revised Medicaid contracts for 2020 to give the authority the ability to impose financial penalties for non-compliance, add measures to ensure accountability related to member care and access and step up monitoring requirements and transparency for subcontractors;
  • Reviewed and validated claims data from coordinated care organizations seven times between December 2017 and December 2019.

It’s not clear when the remaining tasks will be finished. 

“We are focused on completing each of these implementation projects as soon as possible,” Cowie said in his email. “However, each project has its own specific timelines. Many are constrained by external factors.”

The overpayments stemmed from clients who received Medicaid coverage when they should have been insured under Medicare. The misclassification happened under the watch of the former director of the Oregon Health Authority, Lynne Saxton. The current chief, Patrick Allen, replaced her in September 2017.

The status report noted that even when the projects are complete, the agency will have to continue to monitor coordinated care organizations, review the state’s administrative rules, reconcile eligibility systems and use data matching techniques. It also said the agency needs to better understand the accuracy and completeness of the data it uses to set rates paid to coordinated care organizations per member per month.

Cowie said the work will be ongoing.

“In addition to implementing the Secretary of State’s recommendations, we’ll continue to work with CCOs to reduce overpayments, improve our data systems and strengthen business rigor in OHA to ensure Oregon’s Medicaid dollars provide the state’s most vulnerable people and families the health care they need,” he said.

You can reach Lynne Terry at [email protected].

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The title of this piece is way off base. It should have said "OHA has a lot of work to do to clean up its own operation".  The SOS report speaks to internal processes and lack thereof at the OHA. The main problem was the OHA failed to take action on enrolling ineligible people in 2014 and 2015. They knew about the problem, but chose to do nothing expect hide it from the Governor and legislators.

The OHA's response? More oversight of the CCO's. This is total misdirection of effort. While ignoring their own mismanagement, the pretend the bigger problem is with the CCO's. I doubt that they can point to one factual problem in the CCO's that results in fraud or waste. This msdirection and failure to clean up their own act is typical of the OHA.