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

A new auditing system that has hit dentists who serve MaineCare patients with fines as large as $200,000 will spread to the state’s hospitals and potentially other Medicaid services, such as mental health counseling, nursing homes and substance abuse treatment.

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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

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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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State contracts for audits of MaineCare providers give financial incentives for auditors to find minor errors, paying the auditors for all problems they discover. For Maine dentists, the fines totaled nearly $800,000 for errors made in 2012.

Maine may be a “bellwether” for a problem that could explode across the country, a Medicaid audit expert said Wednesday, because the audits are required under the federal Affordable Care Act. But states have wide latitude to design the audits to be more or less punitive to health care providers, experts say.

Next up in Maine are the hospitals.

“We are wary of the rollout,” said Jeff Austin, vice president of government affairs for the Maine Hospital Association. “We don’t know much about it, except that it’s coming.”

Auditors are pulling information from the hospitals, and “audit findings” will be sent to them in the coming months, according to the Maine Department of Health and Human Services.

“This has the potential to really get ugly,” said state Rep. Richard Farnsworth, D-Portland, co-chair of the Legislature’s Health and Human Services Committee.

Although health care providers have been audited previously, the new, more extensive audits are part of the implementation of the new health care law and are designed to root out fraud and abuse.

Dentists say the fines – some more than $200,000 per practice – are unfair because the auditors did not find fraud, but instead charged them for minor clerical errors.

Dentists have told the Portland Press Herald that they may have to close as a result, or reduce the number of patients they serve through MaineCare, the state’s Medicaid program.

DHHS officials said Wednesday that they are listening to the complaints.

“It is important to note that we are working with the providers to better understand their concerns,” John Martins, a DHHS spokesman, wrote in an email response to questions. “All providers have the opportunity to submit any additional information that may refute any of the audit findings.”

Martins wrote that the dentists aren’t being fined, but money must be returned to the state for “audit findings” of errors.

Michael Dowling, a dentist in Falmouth who faces a “substantial” payment to the state, said he fails to see a distinction.

“When we have done nothing wrong and are being financially penalized for it, it seems like a fine to me,” he said. “They can call it what they want to call it, but it’s still a fine.”

Dentists are appealing fines levied by Maine’s contractor, New York-based HMS, which operates in many states. Martins said the state will release the contract to the Press Herald this week, but he was unable to do so Wednesday.

Experts say similar audits are now being done in many states. Whether they will produce large fines is unclear, said J. Paul Spencer, director of coding and regulatory compliance for Providence Health Services in Washington, D.C. Spencer has been following the new Medicaid audits closely for the past three years.

“It’s going to depend on each state’s contract,” he said. “Perhaps this will start in the extreme northeast part of the country and spread across the states.”

Dowling and other Maine dentists are complaining about an auditing method that takes a small sample – 100 patient records – flags errors and extrapolates them to all of a practice’s MaineCare patients.

Based on the files pulled from his office, Dowling said, the sample wasn’t random so the extrapolation was unfair and inaccurate.

(Continued on page 2)

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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