Every reader of this blog should know something. All comments to this blog are moderated. The main reason for this is because due to the proliferation of blog spammers, my number one blog commenter is someone who goes by the name of “Cheap NFL Jerseys”. As I know of no one in the administrative side of healthcare that goes by this name formally, I moderate my comments.

There are very few non-spam comments that I do not pass on the the blog posts. Most of these are of the crazy political conspiracy variety, the internet being the Speaker’s Corner for the entire world. Yet on my post in this space from two weeks ago regarding Medicaid RAC activity, I received a comment from an interesting source, that being the Vice President of Communications at HMS, the company that acts as a Medicaid RAC contractor, co-contractor or subcontractor for (by my last count) 29 states. The e-mail acts in one part for sake of clarification and one part for sake of being defensive, and some of the information shared in this comment is important for the readers. It starts off innocently enough, with the requisite ego-greasing of:

 “HMS appreciates your continuing to provide information about the Medicaid RAC program”.

What follows this sentence is a reading from Book of Damage Control:

“We would like to take this opportunity to note some corrections related to RAC activity in some of the states you reference…”

Rather than attaching this comment to the previous post and leaving it unaddressed, I wanted to offer my comments on their comments. For the sake of the reader, I shall include all communication from the individual in Italics, and add clarifications. It will be helpful to the reader if you click on the link above to my past blog post being referenced:

“Connecticut, Idaho, and New York – At the direction of our clients, HMS does perform Medicare/Medicaid coordination of benefits under either our Third Party Liability or Medicaid RAC contracts.  We are not aware  of the errors you cited.  HMS has a full-time Provider Relations team to service the provider community and providers are encouraged to contact us with any questions.  Providers also have access to our Provider Portal on a 24/7 basis.”

Fi-Med has clients in all three of these states. In reviewing the letters that came for our clients in these states, errors were found, our providers were notified and, where applicable, were brought to the attention of the Provider Relations team.

In an automated review setting, it is understood that the RAC is at the mercy of the data collected by the state, but it does highlight a question that has yet to be answered; who validates the Medicaid data that is forwarded to the RAC for action? Unlike the Medicare RAC program, I highly doubt that there is a RAC Validation Contractor for Medicaid in every state and territory. Perhaps that is a good thing considering that Medicare’s RAC Validation Contractor has thus far come up with Medicare RAC accuracy scores that are patently unbelievable.

“Indiana – As per our client’s request, the Medicaid RAC correspondence in Indiana contains only the state’s logo.”

For providers in Indiana, this is a very important piece of information. This again highlights the importance of reviewing all correspondence that is received very carefully. It is not enough to simply get the records and mail them back, or worse to set aside correspondence for “another day”. Call the numbers on the correspondence immediately demanding answers. Most importantly, treat everything in an envelope that doesn’t have a check attached to it as if it contained anthrax. Investigate it – and where applicable, fight it – until it is resolved and a final answer derived.

On an emergent basis, I would recommend that the providers in the State of Indiana begin to make noise and ask the state why contractors working towards contingency fees are allowed to send out correspondence as if they are the state. This correspondence method should be changed, as it has the potential to be ruinous to medical practices who don’t know enough about the program. As an added note, in putting together this post, I found that the same holds true for the state of New York. Had the request we received not been accompanied by a CD with HMS’ logo on it, we would have never known it was a Medicaid RAC letter.

“Kansas – The work that both HMS and HDI perform in Kansas under both the Medicaid RAC contract and our Third Party Liability contract is performed in accordance with Federal and state statutes, as well as Medicaid policies and procedures.”

This was in response to providers in this state telling me that straight Medicaid payments are being recouped in full if the RAC contractor finds that at the time of service, the patient was covered by a Medicaid HMO.

It’s fine that HDI and HMS are following guidelines. What I have been saying about this practice for over a year does not change. The better way to approach this subject, rather than penalizing providers long after the fact and giving a RAC contractor a contingency fee, is for the state and the HMOs to subrogate these claims between themselves.

Medicaid recipients are notorious for changing claims payment entities in the manner that the rest of us exchange socks. What Kansas, in its infinite wisdom, is telling providers is that even if a Medicaid recipient comes into your office with a card that by all visual measurements is valid at the time of service, you could be penalized 100% of payments received many years down the line if you are wrong. In many cases, the cost of validating eligibility for these patients takes a large chunk out of any payment you would receive from Medicaid. I have asked this question before, and I continue to ask it: is this the message that you want to send to providers 7 months before PPACA  kicks in, leading to the largest expansion of Medicaid beneficiaries since the beginnings of the program?

“North Carolina – HMS’s scope in North Carolina does not include ambulance or hospice claims, and our inpatient hospital reviews do not target specific DRGs. (Please be aware that there are two Medicaid RAC contractors in the state). Also, we operate under a request limit that allows for a maximum of 300 records every 45 days (exceptions are made for smaller providers).”

Let the record show that Public Consulting Group, the Medicaid RAC co-contractor in North Carolina, is the one looking at ambulance services, 5 DRGs for short stays and are dropping the ball on hospice reviews. Additionally, I had the number at 300 records every 30 days, rather than 45 days. My spreadsheet has been updated. It is notable that HMS does not tell us what they are looking at as part of their “inpatient hospital reviews”. I’ll have more on that later.

“Pennsylvania – HMS is not the auditor for the scope of work mentioned (i.e. medical necessity on the hospital side).”

Duly noted. That would be CGI, who has a website set up for Pennsylvania providers here. I want you to take a long look at this particular CGI website. Not only does it have all relevant information related to the work they are doing in Pennsylvania (including, in a general sense, what they are reviewing), but note that I am not a provider in Pennsylvania (despite being a former Pennsylvanian) and I was able to access the website from my seat along the shores of Lake Michigan. Apparently, as we shall learn later, this is not the standard with all Medicaid RAC contractors.

“Tennessee – HMS does not subcontract this work out to its wholly owned subsidiary HDI.”

This would be news to the providers from Tennessee who have reached out to me, as they are receiving correspondence from HDI. Of note, the fact that providers are having payments recouped prior to receiving denial letters has thus far gone unexplained.

Finally, we’d like to mention that HMS has set up Medicaid RAC websites for providers in many states, which are typically restricted to providers in the state.

Where do I begin…….?

There is a fatal flaw in the Medicaid RAC program, and that is a mandated lack of transparency. As we saw above, CGI has created publicly available websites for the states they were awarded (by the way, here is Ohio and here is Washington). It is important to internalize that an entity operating in 29 states has just told me that Medicaid RAC websites, and the information they contain, are restricted to providers in that state. This is on top of the fact that approved issues lists, with CMS’ blessing, will not be shared (and apparently, given the opportunity presented above, still won’t be shared) and the correspondence you receive could look the same as any other letter from your state’s Medicaid agency.

The Medicaid RACs continue to be the airborne virus of the audit world. Much like tuberculosis, you won’t know you’ve caught their attention until your practice bank account begins to consumptively cough up funds. This isn’t some kind of game we’re playing here. Providers who care for high numbers of Medicaid beneficiaries already operate on a knife-edge based on lackluster fee schedules. If you put these providers out of business based on Kafkaesque audit rules, you put the most vulnerable health population in the country at risk just so someone else can make a buck and satisfy their shareholders.

I thank HMS for their input, but based on the federally mandated lack of transparency, I expect that this isn’t the last time I’ll receive such detailed comments such as these.