November 7, 2013

Controversial MaineCare audits to also target hospitals

Health care providers may face heavy fines for small errors like the ones levied on dentists.

By Joe Lawlor jlawlor@pressherald.com
Staff Writer

(Continued from page 1)

Today's poll: MaineCare auditing

Do you believe the new system for auditing the medical records of health-care providers treating MaineCare patients is fair?

Yes

No

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Dr. Michael Dowling works on patient Aiden Serber, 8, of Westbrook, as dental hygienist Trisha Drewry assists Wednesday at Falmouth Pediatric Dentistry. Dowling says new MaineCare audits carry excessive fines for small errors and the state has the ability to make the audits more fair.

Gabe Souza/Staff Photographer

click image to enlarge

Dr. Michael Dowling treats patient Nevaeh LaPlanche, 7, of Wiscasset, at Falmouth Pediatric Dentistry on Wednesday. Dowling says new MaineCare audits carry excessive fines for small errors and the state has the ability to make the audits more fair.

Gabe Souza/Staff Photographer

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He said the errors were minor problems that had no bearing on service or payment, such as one dentist being on the bill while a different dentist did the cleaning.

Spencer said such methods are highly questionable and don’t hold up in court.

“In many cases, when challenged in court, the extrapolation methods are found to be faulty, don’t hold up to mathematical scrutiny, and the dollar amounts originally levied plummet to a small percentage of the original fine,” Spencer said.

He said states can limit or prohibit extrapolation, and if that’s not done, contractors have an opening to gouge health care providers for minor errors. HMS is paid 10.85 percent of the cost of service for every error it finds.

Spencer said states have a financial incentive to give contractors as much leeway as possible to find errors, because any money returned goes back into government accounts. Medicaid is funded with a mix of federal and state money.

“It looks great in a budget line,” Spencer said.

Similar auditing practices have been used for Medicare since 2008, but the process is controlled entirely by the federal government, Spencer said. Because hospitals have deeper pockets and staffs that specialize in Medicare and Medicaid compliance, they may be better able to handle the audits, he said.

Also, Spencer said, the Medicare audits are more transparent, so hospitals have the opportunity to better prepare for the scrutiny.

He said a system with contingency audits, in which auditors are paid based on errors found, is flawed because auditors make more money when problems persist.

Austin, with the hospital association, said the fines under the Medicare audits have been manageable, but the process has been burdensome and auditors disclose little when hospitals try to find out how to correct the problems.

“They’re making money by catching errors. They don’t make money by helping us to correct the errors,” Austin said.

Medicare and Medicaid mandate contingency contracts, but states that have laws forbidding such contracts can get waivers from the federal government and instead pay auditors flat fees. Austin said flat fees would be a fair way to pay auditors.

But he said state law was changed in 2011 to allow for the contingency audits, and he doesn’t know if it can be changed back and still qualify for a federal waiver.

The auditing contracts can be structured to ensure that health care providers aren’t unnecessarily punished for minor errors, Spencer said. For instance, extrapolation could be forbidden or limited, or the state could permit substantial fines only for major errors. A small error could be fined at a much lower percentage, he said.

Rep. Farnsworth said lawmakers will examine all possible remedies to ensure that health care providers are protected from unnecessary fines.

“As it stands now, this is not a fair way of doing business,” he said.

Dowling said the dentists don’t mind being audited, but they are asking for the state to be reasonable in the way fines are assessed.

“The truth is, the state has a lot of discretion,” he said.

 

Joe Lawlor can be contacted at 791-6376 or at:

jlawlor@pressherald.com

Twitter: @joelawlorph@joelawlorph

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Today's poll: MaineCare auditing

Do you believe the new system for auditing the medical records of health-care providers treating MaineCare patients is fair?

Yes

No

View Results