1. Prevention, Detection, and Recovery of Improper Payments Home and Community Based Programs for the Elderly and Individuals with Disabilities Department of Health and Hospitals 1

2. Why We Did This Audit Increasing improper payments over the years Repeat financial audit findings 2

3. Why We Did This Audit (cont) Increasing costs in Long- term Personal Care Services Program – Population rose from 3,000 in FY 2005 to FY 14,000 in FY 2009 Vulnerability of populations in these programs 3

4. Programs Reviewed Program Summary Long-term Personal Care Services (LTPCS) New Opportunities Waiver (NOW) Elderly and Disabled Adults Waiver (EDA) Eligible Population Elderly and adults with disabilities Individuals with developmental disabilities or mental retardation who qualify for institutional care Elderly and adults with disabilities Slots approved No maximum4,6038,682 Individuals receiving services 12,500*4,3007,533 Number on waiting list N/A18,9209,190 Average cost per recipient $16,623$29,620$62,246 FY 2011 expenditure forecast $184,589,989$104,450,746$383,166,489 Number of providers 6576031,513 Maximum service hours per week 32 No maximum service hours. $40,046 is the maximum annual amount per recipient No cap for the total amount of all NOW services per recipient, but there are limits for individual NOW services Source: Prepared by the legislative auditors staff using information provided by DHH. 4

5. GAOs Fraud Prevention Model 5

6. Audit Objectives What enhancements could DHH make to improve its processes to prevent or deter improper payments in home and community based programs? What enhancements could DHH make to improve its processes to detect and recover improper payments? What are some ways DHH could save money in the LTPCS program? 6

7. General Methodology Used ACL and Excel to analyze various databases to test sufficiency of processes – Medicaid claims data showing services paid – Data on recipients – Timesheet data on direct care workers providing services Compared Louisianas processes to practices in other states known for having identified large amounts of improper payments 7

8. Objective 1: Prevention of Improper Payments - Findings Overall, DHH had developed some processes, such as prior authorization of services, multiple MMIS edit checks, and provider enrollment to help prevent improper payments; however, all of these processes needed improvement 8

9. Prevention of Improper Payments -Overlapping Times Used ACL to analyze time coding of direct care workers and found between $700,000 to $1.3 million in improper payments to direct care workers who worked for 2 different companies – 1,563 direct care workers claimed overlapping times 9

10. Prevention of Improper Payments –Duplicate Billing Identified nearly $200,000 in improper payments for direct care workers who claimed they cared for individuals in their home while the individual was in hospital or in nursing home Prepayment reviews would help DHH intercept claims that meet certain criteria prior to being paid 10

11. Prevention of Improper Payments – Prior Authorization of Services Identified nearly $20,000 in improper payments for companies who used prior authorization numbers from previous recipients resulting in two providers billing for same person 11

12. Prevention of Improper Payments – Provider Quality DHH was not in compliance with requirements of the Affordable Care Act which required periodic re-enrollment of providers, site visits, and criminal background checks Could also enhance provider quality by requiring surety bonds and providing training 12

13. Prevention of Improper Payments – Call in Systems Requires providers to call-in from recipients home phone South Carolina and Florida have implemented and have seen cost savings due to reduction in improper payments Louisiana is using in childcare assistance program 13

14. Prevention of Improper Payments – Fines and Penalties Current penalty structure insufficient DHH rarely imposed fines – Only imposed fines on 3% of cases from 2005 to 2010 – Only imposed $96,000 in fines for 1,090 cases despite identifying $4.7 million in improper payments in these cases 14

15. Prevention of Improper Payments – Multiple Offenses 65% of providers had multiple violations Provider NameDate ClosedSanction(s) Amount RecoveredFines Imposed NEW HORIZONS4/6/2006Education Letter NEW HORIZONS4/18/2006Education Letter NEW HORIZONS5/22/2006 Education Letter and Voluntary Payment $408.00$0.00 NEW HORIZONS6/29/2006 Education Letter and Voluntary Payment $84.00$0.00 NEW HORIZONS8/14/2006Recoupment$36,587.12$0.00 NEW HORIZONS2/8/2007Recoupment$6,393.00$0.00 NEW HORIZONS2/8/2007Recoupment and AG Referral$3,192.00$0.00 NEW HORIZONS7/16/2007 Recoupment, AG Referral and Education Letter $24,663.00$0.00 NEW HORIZONS4/16/2008 Recoupment, AG Referral, Education Letter, Internal Referral and Other Referral $26,458.00$0.00 NEW HORIZONS4/16/2008 Recoupment, AG Referral, Education Letter, Internal Referral and Other Referral $37,141.50$0.00 NEW HORIZONS9/15/2008Other Referral NEW HORIZONS9/23/2008Other Referral NEW HORIZONS9/23/2008Other Referral NEW HORIZONS7/13/2010Recoupment, Fine, and AG Referral$1,511.00$1,000.00 NEW HORIZONS12/28/2010Recoupment$1,691.74$0.00 TOTAL $138,129.36$1,000.00 15

16. Objective 2: Detection and Recovery of Improper Payments No programmatic monitoring of LTPCS providers No on-site financial monitoring of any providers Data mining efforts could be enhanced with hiring of individuals with expertise 16

17. Detection and Recovery – Analysis of Denied Claims Analysis of claims denied due to errors would help identify problem providers – In one month, 38% of LTPCS claims had attempts to submit duplicate billings and 19% of claims included attempts to over bill the amount of services prior authorized 17

18. Objective 3: Reduction of Costs in LTPCS Program Found approximately 1,000 recipients in LTPCS program who shared the same address Could save $3.5 million if one direct care worker cared for two people in the same home Cost Savings of Using Shared Supports with LT-PCS Number Residing at Same Address1053 Current Total Per Week$353,808 Proposed Total Per Week$286,079 Savings Per Week$67,729 Savings Per Year$3,521,908 18

19. Reduction of LTPCS Costs When service hours reduced, everyone urged to appeal hours; during appeal recipients get maximum service hours Appeals average 5 months; 64% of cases DHH won the appeal If DHH reduced length of time, they could save $284,000 for every month reduced 19

20. Impact of Report Identified a total of $5 million in either improper payments or cost savings. Agency agreed with all recommendations Fraud auditors in our office issued a report based on investigating direct care workers identified in this report All data on overlapping times was requested by Medicaid Fraud Control Unit (MFCU) for investigation 20

21. Report Impact (continued) Agency developing call-in system for direct care workers Agency developed rule requiring shared supports for the LTPCS program 21

22. Report Impact 1.Topic Selection – topic should be something the public and agency care about 2.Subject should have past issues or be at risk for future problems 3.Audit involves various data analyses with quantifiable results 4.Audit findings have the potential to save money or generate more revenue 22

23. Questions? Contact Information Karen LeBlanc Louisiana Legislative Auditor Kleblanc@lla.la.gov 23