California Eyes Medicaid Program Abuses

Several days after holding a series of stakeholder meetings to discuss its intention to launch a competitive bidding demonstration project for DMEPOS purchased by its Medicaid program, California’s Department of Health Care Services (DHCS) released its fourth annual Medi-Cal Payment Error Study (MPES).

Medi-Cal is California’s Medicaid program.

In a news release, DHCS said it found that 93.44 percent of 2007 Medi-Cal payments to fee-for-service Medi-Cal providers were billed and paid correctly. While DHCS reported that percentage was an improvement over 2006’s correct-payment rate of 92.73 percent, the agency said it wants to become even more aggressive against fraud.

“DHCS has a strong, proactive monitoring system to alert us of efforts to defraud the Medi-Cal program,” said DHCS Director David Maxwell-Jolly. “The MPES targets areas at greatest risk of provider payment errors, helping to focus our anti-fraud efforts where they are needed most.”

Governor Arnold Schwarzenegger’s revised 2009-2010 budget, DHCS said, includes $3.4 million in funding to pay for “a new Medi-Cal initiative. It will more aggressively target fraud in adult health-care centers, pharmacies, physicians, transportation services and durable medical equipment transactions.”

DHCS expects that initiative to eventually save California “$87 million in future years.”

DHCS last week talked to Medi-Cal stakeholders about subjecting some DME, including adult manual wheelchairs, to a competitive bidding demonstration project, in which Medi-Cal would choose a handful of DME manufacturers with which to work, thereby severely limiting physician, clinician, provider and beneficiary choice and input.

California’s Medicaid program serves more than 6.8 million low-income beneficiaries, including people with disabilities. Medi-Cal has a yearly budget of nearly $41 billion. California’s severe budget crisis has made national news repeatedly this year.

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