Program Integrity

Clarence Ervin - Assistant Director
Phone - (919) 647-8000
Fax - (919) 647-8054

Devoted to ensuring that Medicaid payments are accurate and that fraud, waste, or abuse are identified.  

If you suspect fraudulent activity involving Medicaid providers, please contact us directly (located in "What Each Program Integrity Section Does") or call any of the following toll free phone numbers:

• You can reach the Program Integrity Section toll free by calling the CARE-LINE at 1-800-662-7030 and asking for the DMA Program Integrity Section, or
• Call the Health Care Financing Administration Office of Inspector General's Fraud Line at 1-800-HHS-TIPS or
• Call the State Auditor's Waste Line --- 1-800-730-TIPS, or
• Call the Attorney General's Medicaid Investigations Unit at (919) 881-2320.

You can remain anonymous; however sometimes in order to conduct an effective investigation, staff may need to re-contact you. Your name will not be shared with anyone investigated.

• Who We Are
• How An Investigation Begins
• Program Integrity And Criminal Fraud Prosecution
• Public Concern Over Fraud, Waste And Abuse In Health Care
• Money Recovered From Program Integrity Investigations
• Medicaid Recipient Fraud
• How To Report Recipient Fraud
• The Program Integrity Mission

WHO WE ARE

The Program Integrity Section (PI) of the N.C. Division of Medical Assistance (DMA) has seven sections and 104 employees devoted to accountability of how the public's money is spent for Medicaid services in North Carolina. Go to this link to learn What Each Program Integrity Section Does

Program Integrity assists in continually improving the Medicaid program by:

• conducting claim and program reviews to identify areas of error, incorrect payments, possible fraud or billing abuse, or where corrective action is required
• identifying third party coverage that will offset Medicaid's payment, collecting payments made after Medicaid has paid and assuring that future claims are billed to the primary insurer
• identifying and assisting in the development of claim payment system audits and edits which can deny rather than pay a claim improperly
• conducting reviews directly with the providers and recipients of services to validate medical need and the delivery of the service
• communicating our findings to DMA managers and other DHHS agencies
• providing technical support and suggesting strategies for improvement
• working collaboratively with the claims contractor (EDS), DMA and provider organizations to identify methods for correction and improvement
• conducting follow-up reviews to determine whether the corrective action efforts were successful or need additional process improvement
• referring cases of possible fraud to the Attorney General's Medicaid Investigations Unit (MIU)

HOW A FRAUD AND ABUSE INVESTIGATION BEGINS

Program Integrity receives complaints from patients, their families, other providers, former employees of a provider, and through federal and state referrals. Program Integrity staff investigates every complaint. In addition, we also identify patterns of fraud and abuse through our Fraud and Abuse Detection System (FADS),

Our FADS uses two software tools: HealthSpotlight™ -- an interface tool with billing comparison models and specialized fraud filters and OmniAlert™ -- a Surveillance and Utilization Review System (SURS) that can identify aberrant billing patterns among similar peer groups. These tools, plus increased automation in the agency, have made it easier to identify fraud or abuse, investigate it, and recover overpayments faster.

Program Integrity targets areas with a high risk potential for abuse. We also submit suggestions for improvement to DMA Management who then work with the provider associations to find solutions.

PROGRAM INTEGRITY AND CRIMINAL FRAUD PROSECUTION

While Program Integrity identifies Medicaid fraud, the Attorney General's Medicaid Investigations Unit (MIU) takes the legal action to convict a provider of criminal fraud. The MIU coordinates their efforts with the IRS, State Bureau of Investigation, FBI, Drug Enforcement Agency, U.S. Attorney, Office of Inspector General and the Medicaid Fraud Control Units in other states to resolve fraud cases. As a general rule, once a case is taken by the MIU, Program Integrity staff involvement with the provider ceases.

PUBLIC CONCERN OVER FRAUD, WASTE AND ABUSE IN HEALTH CARE

Health care costs are increasing every year. The available money to fund Medicaid and other State programs is decreasing. Fraud and abuse takes money from needy children, the elderly, blind, and disabled. Therefore, identifying, investigating, preventing and recovering money billed improperly to Medicaid is an important mission for this agency.

The majority of providers and their billings are honest and accurate. However, one dishonest provider can take thousands of dollars slowly over time by billing for services not rendered or medically unnecessary. Far worse, with computerized electronic billing, one dishonest provider can illegally take hundreds of thousands of dollars in a few weeks or months. These occurrences often provide a negative perception of the overall program.

While many PI reviews are targeted at specific complaints or suspicions, often our reviews are routine. Our review process is not intended to impugn the integrity of any provider or category of care but merely to verify the accuracy of the need, provision, and payment for the services provided. We attempt to make every routine review as convenient as possible and work with the provider to reduce the distraction that might occur.

Program Integrity is committed to identifying Medicaid overpayments and fraud. We actively pursue any leads indicating fraudulent practices and use them as a source to begin investigations. To increase our effectiveness, we have partnered with the Medicare carriers and Federal staff to share information about fraudulent activity and conduct joint investigations.

Review decisions can result in refunds to the program for inappropriate Medicaid payments, training on how to correct or improve billing practices, referral to licensing boards, and/or referral to the N.C. Office of the Attorney General for suspected fraudulent practices.

MONEY RECOVERED FROM PROGRAM INTEGRITY INVESTIGATIONS

PI recoveries are increasing due to the addition of computer automation and additional staff.

SFY 04 -- $26,154,859
SFY 03 -- $11,268,920
SFY 02 -- $8,343,835
SFY 01 -- $5,966,879
SFY 00 -- $4,403,083
SFY 99 -- $8,023,163
SFY 98 -- $4,778,443
SFY 97 -- $3,518,995

NC has lead in recoveries in HCFA Region IV in 11 of the last 12 years (Source: HCFA 64 Report). Our average "recoveries per investigator" have grown from $191,618 in SFY 96 to $417,191 in SFY 02.

From 7/99 through 6/00, we assisted the Attorney General's Medicaid Investigation's Unit (MIU) with case and data support helping them recover $2,627,841 as part of their total recoveries. We also provided additional support work to the MIU and helped identify millions of dollars in overpayments in additional cases pending upcoming legal action. The MIU is expected to exceed old records for both convictions and recoveries this year.

Recoveries reflect only a small part of what we achieve. Our recovery figures are understated estimates of our performance.

• Recoveries do not reflect "loss avoidance" from interventions with providers that change billing practices that stop fraud/abuse before more claims are paid.
• Recoveries do not include the improvements identified and made to the claims processing system to deny improper claims at prepayment.
• Recovery figures do not reflect the "system generated" recoveries that are made directly by the company that processes our claims.
• It does not reflect money refunded voluntarily by providers directly to our claims processor when the provider becomes aware that we are looking at them, conducts their own "self audit" and then voluntarily refunds money.
• Lastly, it does not reflect the "sentinel effect" that deters fraudulent or abusive billing.

MEDICAID RECIPIENT FRAUD

Recipient fraud can occur when a recipient fails to report information to their county department of social services and receives Medicaid authorization for which he or she is not entitled. Fraud can also occur when a non-recipient uses a recipient's card with or without the recipient's knowledge. The county department of social services agency investigates this type of fraud. The counties are responsible for recipient investigations, prosecution and recovery of those types of overpayments.

HOW TO REPORT RECIPIENT FRAUD

Each of the 100 county departments of social services has at least one designated fraud investigator to cover fraud in Medicaid, Public Assistance, and the Food and Nutrition Services program (formerly called food stamps). You can reach the county department of social services investigator by using your local phone book, calling information or by calling the State's Information and Referral Service -- CARE-LINE: 1-800-662-7030.

Updated April 22, 2008