Doctors Say States’ Medicaid Audit Efforts May Force Them Out

Many states are using automated computer systems to detect Medicaid billing errors and fraud, and "outraged" physicians in some states say the efforts could cause them to drop out of the program, the American Medical Association's American Medical News reports. In the face of "big budget shortfalls," about a dozen states are using computer technology to ensure Medicaid funds are "being spent properly," reviewing billing statements submitted up to three to five years ago. After identifying errors, states send computer audits to physicians, informing them of the money they "owe" to Medicaid. But doctors say that the efforts are "tainted" because outside contractors hired to conduct the audits are paid a portion of funds they recover; in addition, doctors question the accuracy of computer programs used to identify billing errors. The automated audits have been "more controversial in some states than others," American Medical News reports. While doctors in Texas and North Carolina have been "more involved in the systems' development" and hence less frustrated, some doctors in Washington, Kentucky and Maine say the efforts could drive them out of the Medicaid program.

Washington Woes
American Medical News reports that doctors in Washington state started receiving letters last fall requesting they return money "without much explanation about the alleged problem." About 167 of the state's 6,680 physicians who participate in Medicaid have received such letters. Doctors say it is difficult to "fight inappropriate billing allegations" because recent changes to Medicaid rules make it difficult to "keep track of what was allowed when they billed for the services." The Washington State Medical Association is pursuing legislation to address the issue, but former WSMA president John Gollhofer said state officials "don't understand how serious the problem is. This is probably going to be the last straw for people taking Medicaid patients."

'Resentment' in Kentucky, Maine
Doctors in Maine and Kentucky also have been "frustrated" by the audits. The Maine Medial Association is trying to halt the audits though legislation. MMA executive vice president Gordon Smith said, "There's a heck of a lot they can do to find [the] $5 million" the state hopes to recover. "It's not worth aggravating doctors who treat Medicaid patients at cost or below." But Maine's Department of Health Services defended the program. DHS spokesperson David Winslow said it helps ensure that "the $1.3 billion taxpayers spend on the Medicaid program is used wisely." In Kentucky, the Cabinet for Health Services calls its efforts "successful," as audits have helped identify and correct "honest billing errors" worth about $5.1 million so far. The state expects to recoup a total of $7.3 million from 3,800 state doctors who were audited last year. However, Kentucky Medical Association President Bill VonderHaar calls the situation "a mess" for doctors. He said, "Several doctors who got small bills just paid them because it was cheaper than fighting it. Additional physicians dropped out of Medicaid because of it" (Albert, American Medical News, 2/19).