lfotheringill120dsThe Deficit Reduction Act of 2005 provided the resources to establish the Medicaid Integrity Program (MIP), the first national strategy in the 40-year history of the Medicaid program to promote the fiscal integrity of Medicaid by detecting and preventing provider fraud, waste and abuse.


This program has been a concern to most providers who already are under siege with RAC audits and other Medicare audit programs. I thought it would be a good idea to look at what has happened so far with the MIP program to get some sense of what providers can expect going forward.


So how is the MIP doing? According to the Secretary of Health & Human Services’ June 2009 Report to Congress on the MIP’s fiscal year 2008 performance, that time period “marked an impressive year of program accomplishments.” As taxpayers, we should hope so; appropriations for the MIP totaled $105 million by the end of 2008 and would continue at a clip of $75 million in FY 2009 and each year thereafter. Of course, as providers, we wonder how much more we can take of government audit programs.



Where Did the Money Go?


So what did that $105 million in appropriations produce? From what I can glean from government reports, the return on investment thus far remains elusive. Use of the funds has gone to “Staffing and Program Support/& Administration,” staff training, so-called “Support & Assistance to States,” development of a “Data strategy, Information Technology Infrastructure,” and most notably to Medicaid Integrity Contractors (MICs).


Unlike the RAC contractors, MICs are not paid on contingency. In FY 2008 the three types of MICs received $20,510,469 in taxpayer money and were charged to perform the following activities:



1. Review-of-Provider MICs were to:

  • Analyze claims data to identify potential vulnerabilities;
  • Provide leads/target audits to the Audit MICs; and
  • Use data-driven approaches to focus efforts on aberrant billing practices.


(Review MICs include AdvanceMed, ACS Healthcare, Thomas Reuters, Safeguard Solutions (SGS) and IMS Government Solutions.)


2. Audit-of-Provider MICs were to:

  • Conduct post-payment audits of Medicaid providers;
  • Perform a combination of field audits & desk reviews; and
  • Identify overpayments.


(Audit Provider MICs include Booz Allen Hamilton, Fox & Associates, IPRO, Health Management Solutions and Health Integrity LLC.)


3. Education MICs were to:

  • Develop training materials and awareness campaigns; and
  • Highlight value of education in preventing fraud and abuse.


The launch of the Medicaid Integrity Audit Program actually did not occur until April 2008, when Thomas Reuters began conducting data mining to help identify Medicaid providers with suspect billing patterns. Provider audits began in Florida and South Carolina at the end of FY 2008; audits in other jurisdictions began in FY 2009. Government reporting on the fiscal ROI effect of the audit activities is sparse. Secretary Kathleen Sebelius states only that, “at the end of FY 2008, preliminary findings from the test audits had identified approximately $8 million in overpayments.”

One would think that since the Medicaid Integrity Program was created by the Deficit Reduction Act with the stated purpose of promoting the fiscal integrity of the Medicaid program, our government would be expecting a clear-cut payoff from the $180 million in appropriations to date.


Accordingly, I continue to believe that MIC audit activity will get underway in earnest during the next few years and that providers soon will feel significant fiscal pain. A report on FY 2009 is due out in May or June of this year and may be more telling on what $180 million in appropriations can accomplish and what providers can expect.



About the Author


Linda Fotheringill, Esq., is a founding member of Washington West, LLC, and is a nationally recognized expert on denial and appeals management. Ms. Fotheringill successfully assists hospitals across the country, overturning “hopeless” denials and generating millions of dollars in otherwise lost revenue.


Contact the Author:


Share This Article