Kansas Medicaid Audit Finds $13M in Suspicious Claims

An audit of Kansas’ Medicaid program found $13 million in suspicious claims including one that claimed a Caesarean section was performed on an 8-year-old boy.

In response to the audit, the state’s health authority noted that the number of suspicious claims were a small percentage of total claims and that auditors found no significant systemic problems.

The findings of apparent fraud and abuse in the $2.4 billion health care program for Kansas’ poor were presented Friday to a House-Senate audit committee, less than a month before lawmakers begin the 2009 legislative session facing a massive state budget deficit.

The Division of Post Audit recommended that the Kansas Health Policy Authority, the primary agency responsible for administering Medicaid in Kansas, should work more closely with private contractors, the Kansas Department on Aging and the Kansas Department of Social and Rehabilitation Services to refine control of expenditures.

Andy Allison, deputy director at the state’s health authority, said auditors found that less than 0.5 of a percent of Medicaid spending from October 2005 to September 2006 – the most recent year available – were termed “suspicious” or “more likely to be problematic.”

“We are pleased that the audit revealed no systemic problems warranting significant and immediate action and welcome the recommendations to help improve payment accuracy,” he said.

Levi Bowles, an auditor who presented the findings, said the analysis identified $13 million in suspicious Medicaid claims. Those included $10.5 million claimed by more than 10,000 clients whose household income exceeded program limits.

The audit also found that 266 Medicaid clients who did not have a valid Social Security number – or any Social Security number at all – claimed $680,000 in benefits. Rep. Virgil Peck, R-Tyro, said the number of clients without a Social Security card indicated that undocumented immigrants were using Medicaid programs in Kansas.

The state pays about 40 percent of claims, or $1 billion annually, with the federal government pays the rest.

Bowles said the audit team found more than $590,000 in potential “upcoding” – charging rates higher than normal – by physicians. The analysis found 277 doctors who may have been upcoding a significant number of their office visits and 233 physicians billing emergency room visits at a significantly higher rate than normal.
And auditors found 519 Medicaid Kansas clients may have received prescriptions for controlled substances from five or more doctors in a single year, which Bowles said indicated potential abuse by doctor-shoppers.

Those clients obtained more than $600,000 in prescriptions for morphine, Vicodin, oxycodone and other substances.

Bowles said one case found that $941 was paid for a Caesarean section on an 8-year-old boy.

“Authority officials said this claim was caught by four different system controls, but a data entry clerk improperly overrode each of these controls,” the report says. “Officials told us the clerk has been counseled.”

Information from: The Topeka Capital-Journal, www.cjonline.com