Medicaid fraud cases more often result in settlements than criminal prosecutions, a health official says.
Discovered scammers few, far between
This story is the latest installment in the Las Vegas Review-Journal’s occasional series titled Hard Medicine. Launched last year, the series strives to cover how the state’s Medicaid system works and where it doesn’t, show some of the Nevadans it has helped and takes a close look at the costs and whether they are sustainable over the long haul.
The expansion of Medicaid in Nevada in 2014 made mental health care much more widely available in a state ranked last in the nation for access to such services. It also provided a great opportunity for bad actors.
Take Jeanice Rae Moore of Reno, for example. She billed the state of Nevada for behavioral health services that she never provided through her company, JayLaray Caregiving Place, before being convicted of defrauding Medicaid, according to a March news release from the state attorney general’s office.
Or Kenneth Hollingsworth and Tonya Martin-Lowe, who were sentenced in 2017 for failing to maintain accurate documentation for behavioral treatment at the Because We Care clinic in Las Vegas. The business itself also was found guilty of Medicaid fraud less than a year later.
The individuals were sentenced to prison terms, all of which were suspended. They were instead placed
on probation and ordered to pay restitution ranging from about $1,200 to more than $56,000.
Hollingsworth said he was framed and called the charge embarrassing. He later called back and said an illness caused him to make mistakes on patient’s records, adding that he has now left the medical business and is a pastor. He wouldn’t say where.
Moore and Martin-Lowe could not be reached for comment.
Because We Care, LLC, which employed Hollingsworth and Martin-Lowe, was placed on three years of probation. Kevin Quick, listed as manager of the business, told a Review-Journal reporter to call back later, then did not respond.
These cases are just a few of the successful prosecutions touted by the office of Nevada Attorney General Adam Laxalt in a steady parade of news releases in recent years. But an investigation by the Review-Journal shows that catching those who abuse the Medicaid system is a tortuous process that can either come too late or result in relatively minor penalties.
And while those investigations drag on, other fraudsters are undoubtedly adding to the $56 million deficit Nevada Medicaid predicts it will face in the 2019 fiscal year, up from last year’s $30 million forecast at this time.
The Medicaid expansion has certainly “exacerbated” the problem of fraudulent or improper claims in the field of behavioral health, said Cody Phinney, deputy administrator of the state Division of Health Care Financing and Policy.
Suspicious claims from mental health providers led Nevada Medicaid to investigate $73 million paid out in the 2018 fiscal year, according to the Department of Health and Human Services. So far, about $10 million — or 13 percent — has been recovered by the division that Phinney helps oversee.
The state’s Medicaid office also flagged 85 mental health providers for investigation last fiscal year and has terminated contracts with 33 of them, state data show.
Those 33 were passed to the state attorney general’s Medicaid Fraud Control Unit, Medicaid officials said. It’s not clear if those investigations have yielded civil or criminal cases yet, as the investigations of such cases are labor intensive and can drag on for months or years.
But just nine providers were convicted of Medicaid fraud related to behavioral health care in fiscal 2018, which ended June 30.
Cases unsubstantiated by evidence or those in which witnesses are unavailable are sent back to Nevada Medicaid for administrative recoupment, a sort of “civil settlement,” according to the attorney general’s office spokeswoman, Monica Moazez.
Phinney said cases more often result in settlements than criminal prosecutions, though she didn’t have the precise breakdown on hand. The attorney general’s office instructed a reporter to make a public records request, which would produce a response in late October.
When an investigation fails to produce evidence pointing to criminal intent, providers are often able to continue working.
The state Board of Medical Examiners will investigate any claim that suggests a licensee violated the standard of practice. But if the Medicaid Fraud Control Unit investigation leads to a settlement without admission of wrongdoing, it’s unlikely the board, with limited resources, will determine otherwise, Executive Director Ed Cousineau said.
“I don’t think we’ve had too many cases of Medicaid fraud conviction cases come across the board’s radar,” Cousineau said. “What we do see at the board, what does come to us, we obviously investigate and prosecute as appropriate.”
“Appropriate” varies on a case-bycase basis. “There’s no absolutes,” he said.
Medicaid operates on a “pay-andchase” model that in some ways resembles the old arcade game “Whack-A-Mole.” The state receives claims, pays and sometimes even overpays providers.
Then, when it detects a suspicious climb in claims using specific billing codes over the course of a year, it goes hunting for fraud.
Chuck Duarte, former administrator for the state program and now CEO for Community Health Alliance, a health care provider in the Reno-Sparks area, describes the process this way: “Find a problem, stop the bleeding, and then conduct a review.”
In those reviews, Medicaid staff analyze claims, then look at medical records and other provider documentation to determine whether a case is merely a case of mistaken data entry or meets the bar to be forwarded to the attorney general’s office for a fraud investigation.
Not all investigations lead to findings of fraud. Many providers said they were confused by frequent changes to the Medicaid Services Manual policies. In those cases, staff often educate the provider on proper billing and move on.
But if the evidence indicates the bogus billing was intentional, Medicaid can terminate that person’s contract and solicit repayment.
But that sometimes doesn’t lead to recovery of the ill-gotten gains.
If a person closes up shop before Medicaid has made contact, for example, the state may not be able to recover those dollars, Phinney said.
“I may not have recourse,” she said. “I may not be able to recoup the money that’s gone out the door because unless there’s a criminal action that can be taken by another group, we don’t have the authority.”
Ultimately the state Medicaid office swallows such debt and repays the federal government 65 percent of the improper payments, reflecting the level of funding it provides to the program.
Proving fraud can be difficult, especially if there’s limited documentation, said Andrew Schulke, senior deputy attorney general for the Medicaid Fraud Control Unit.
Investigators often use documents showing where and when a provider delivered a service and cross check those answers with patient recollection or records, he said.
Regardless, Schulke has to prove specific intent. In other words, investigators have to show that a reasonable person would know their actions were wrong.
Most often, he said, providers claim confusion in an effort to explain the wrongful bills. “Providers love to use mistake and confusion” as excuses, he said. “It’s one of the biggest hurdles we face.”
Medicaid Administrator Marta Jensen said improper payment is only partially to blame for the expected deficit the program faces next year.
“Our caseload is remaining relatively flat. Our (patients) are actually
receiving more services,” she said, explaining why the deficit projection increased. Even so, she said she expects the red ink to decline during the year ahead.
Conviction isn’t loss of licensure
Even when providers are convicted of fraud or forced to make repayments through a civil settlement, that doesn’t necessarily translate to a loss of medical licenses.
Professional licensing boards, like the state’s Board of Medical Examiners, say they monitor news releases from the attorney general’s office flagging convictions and initiate administrative actions in response to strip those providers of their ability to practice.
But some are trying to strengthen the review process. The Board of Examiners for Marriage and Family Therapists and Clinical Professional Counselors, for example, doesn’t receive notice of convicted licensees or those being investigated and only recently established a relationship with Medicaid staff in hopes of keeping better track of their licensees’ activities, said Jake Wiskerchen, the board’s president.
“As a board, we really want to do our best to protect the public, and in order to do that, we need as much information as possible,” he said.
Before, he said, office staff would have to manually check Medicaid’s exclusion list for their licensees.
In the meantime, the board is working on a backlog of 40 uninvestigated complaints, he said, which could include cases of fraud.
To put a stop to overpayment and fraud, Medicaid creates sweeping policy changes that affect all providers. Prior authorization is one of them.
The mechanism, which requires providers to submit paperwork for approval of requested services
before they are provided, has been a topic of debate between Nevada Medicaid and mental health practitioners, who argue the requests often delay or deny care for vulnerable patients.
Medicaid also institutes service limits, like capping psychotherapy and neurotherapy treatment at 18to-26 sessions per patient, depending on age. But with a 40-year-old software system that won’t be upgraded until next year, automated service limits can prove difficult to enforce, Phinney said.
Until July 5, the system wouldn’t deny claims for services that exceeded the limits for psychotherapy and neurotherapy sessions, so providers got paid. Now, Medicaid is asking providers for the money back, sometimes in the thousands of dollars.
Phinney argues those are necessary tools for protecting clients.
“It’s not the goal to negatively impact the people who need therapy, and it’s not the goal to negatively impact legitimate providers,” she said. “But it’s important that we focus on people getting what they need that helps them recover.”