With serious implications for the government's ability to detect fraud, waste, and abuse in the Medicaid system, an Office of Inspector General report found a lack of timeliness, accuracy, and comprehensiveness of the federal database used for that purpose.
Key problems were found with the Medicaid Statistical Information System's (MSIS) tolerance for errors in the data submitted, which allowed certain claims filed by states seeking reimbursement "to clear quality review with an unknown number of errors," the report said. Error tolerance levels were frequently adjusted upward to allow 100% of errors to slip through so the claim could pass through quality review.
The MSIS is maintained by the Centers for Medicare and Medicaid Services for 57 million beneficiaries, at a cost of $308 billion in 2006, $174 billion of which was paid by the federal government.
The database has been seen as a key element to be used by the Health Care Fraud Prevention and Enforcement Action Team, (HEAT), created by the U.S. Department of Justice in May as an interagency effort to combat health care fraud.
Among other problems identified in the MSIS system:
It did not capture 55% of service provider identifiers that would assist in fraud, waste, and abuse detection. "For example, MSIS did not capture the referring provider's identification number," to indicate who ordered the medical procedure, product, or service. "Without the referring provider identification number, fraud analysts cannot use MSIS data to assess whether a qualified physician submitted the order as required to receive certain medical benefits."
In a 2002 report, the OIG used referring provider ID numbers to estimate that Medicare paid $61 million for improperly documented services in 1999.
It did not capture almost half of the procedure product and service description data elements. Such elements specify "the tooth number, quadrant or surface subject for dental procedures."
"Without these details, fraud analysts would have difficulty using MSIS data to detect fraudulent Medicaid claims for duplicate or medically unnecessary dental procedures," the report said. Incorrect information about the tooth surface subject to dental procedures contributed to an estimated $12 million in improper Medicaid payments in 2003.
It did not capture 42% of billing information elements, such as dispensing fee payment information. "Without details regarding fees paid, fraud analysts cannot use MSIS data to assess whether the total amounts claimed and reimbursed contain inappropriate fees," the report said.
"For example, in a 2008 report, OIG analyzed data obtained directly from states to determine that Medicaid dispensing fee reimbursement rates were about $2 higher than the average Medicare Part D dispensing fee."
It did not capture 36% of the beneficiary eligibility data elements required to detect fraud, abuse, or waste. "Three of the four missing data elements were for the beneficiary's name (first, middle, and last name). Absence of beneficiary names may hinder analysts' ability to reliably match Medicaid claims data to other sources."
The MSIS is the only nationwide Medicaid eligibility and claims information source. It was approved in 1984 as a voluntary state reporting option for electronic Medicaid fee-for-service claims. In 1997, the Balanced Budget Act mandated MSIS-program participating in 50 states and the District of Columbia starting in 1999.
As of last month, 34 states were sending their MSIS files electronically. The system is also used for healthcare research and evaluation, program utilization and expenditure forecasts, congressional inquiry responses, and other health-related database searches.
Other findings included the fact that the MSIS data were on average 1.5 years old when they were publicly released. This was due to states missing the deadline for filing claims and for the lengthy time eligibility forms and claims spent in the quality review process.
Also, despite the fact that the Department of Justice and the OIG in 2007 identified 182 data elements that help with fraud, abuse, and waste capture, not all of those elements are in fact collected by the MSIS system.
"We determined that Medicaid Statistical Information System (MSIS) data were not timely, accurate, or comprehensive for fraud, waste, and abuse detection," the OIG said.
"CMS did not fully disclose or document information about the accuracy of MSIS data," the report added.
The 27-page document was prepared by Stuart Wright, OIG deputy inspector general for evaluation and inspections, and was addressed to Cindy Mann, director of the Center for Medicaid and State Operations.