Ashe County may be responsible for $446,266 of that total bill.
The N.C . Division of Medical Assistance, the state agency that regulates Medicaid payments, issued a “tentative finding of overpayment,” in a letter to the New River Service Authority Monday morning.
The letter, dated Feb. 6, from the N.C. Department of Health and Human Resources/NC Division of Medical Assistance outlines a detailed list of Medicaid claims the agency has labeled “out of compliance,” meaning NRBH received payment for services not properly documented or provided.
Ashe County Manager Pat Mitchell said she learned of the decision by the DMA’s Program Integrity Unit last week, and received the letter Monday morning.
“The letter has “Tentative Notice of Overpayment,” (Meaning that Medicaid has overpaid New River),” said Mitchell in an email.
The DMA did not investigate each Medicaid claim submitted by NRBH, but did examine a random sample of 170 claims. Investigators utilized a statistical technique that examined the amount of overpayment in the random sample, and extrapolated those findings to all NRBH Medicaid claims from July 14, 2010 to Aug. 30, 2011.
“The goal of sampling is to determine the qualities of the population without examining all the elements in that population,” reads the DMA letter. “Random selection of items is necessary in order to produce a valid sample.”
To produce accurate results, random samples must be selected in an unbiased manner, and must “closely reflect the characteristics of the population.”
170 Medicaid claims were examined by the DMA, out of 37,272 total claims, and found Medicaid overpaid NRBH in 104 instances, or 61 percent. NRBH received slightly more than $3.8 million in Medicaid reimbursements. Based on the overpayment in the random sample, the DMA determined NRBH owes roughly $2.125 million.
Ashe County may be responsible for up to 21 percent of the bill ($446,266), on a pro rata basis, according to Mitchell who indicated in her email that she will be discussing options available to the county, including an appeal of the tentative amount.
“We (the NRSA) have not had a conversation as of yet,” said Mitchell Tuesday morning. “Until the board meets, I really can’t speak to any potential appeal process we might be able to engage in if we are advised we can even go that route.”
At this juncture, Mitchell said she was not sure that, with a skeleton staff of two, if the NRSA would even be able to appeal the decision.
In January, the consulting firm hired by the NRSA, Martin Starnes and Associates, released the results of their own investigation that found, “Unreliable financial reporting, ineffective management of patients accounts receivable, and lack of operational controls over service delivery,” led to NRBH’s demise.
Mitchell said the results of the DMA investigation confirmed the work of Martin Starnes.
“I don’t think the Medicaid audit letter brings in to question Starnes work at all,” said Mitchell. “They (Starnes) said there was no indication of fraud or embezzlement. Fraud can be deliberate but, in Medicaid language, fraud can also be recording something incorrectly.”
Mitchell indicated that the findings of non-compliance by the DMA were not the result of new regulations NRBH was learning to comply with.
“I had asked that question (if confusion due to new regulations caused the noncompliance),” said Mitchell. “But was told that, ‘no,’ these were regulations for years.”
The fate of more than $600,000 in Medicaid claims filed by NRBH through the month of December is also an open question, according to Mitchell.
In their report, Martin Starnes found that NRBH staff had filed Medicaid claims, and re-filed denials, through the month of December 2011, and that suspended claims worth $626,977 “are approved, due, and payable to NRBH as soon as Medicaid completes its fraud investigation and releases funds to NRBH.”
“It’s all up in the air,” said Mitchell. “Will we be paid that $626,000 and then made to pay back the $2.1 million? Will Medicaid simply withhold the $626,000 and require us to pay the difference? I don’t have any idea how we’ll address that until we sit down at the table.”
"In general, fraud is defined as making false statements or representations of material facts to obtain some benefit or payment for which no entitlement would otherwise exist. These acts may be committed either for the person’s own benefit or for the benefit of some other party. In other words, fraud includes the obtaining of something of value through misrepresentation or concealment of material facts....It is a crime to defraud the Federal Government and its programs. Punishment may involve imprisonment, significant fines, or both."
This was a NC Dept of Medical Assistance audit of the Medicaid claims which they do from time to time as part of the "Program Integrity Unit". This is not the first time that NRSA has had such an audit and had to make such repayments.
The question is how much has NRSA had to pay back in total in prior years. And, did they "knowingly" submit such claims?
This was not a Fraud Investigation. So, did the NC DMA refer there finding to the NC State Attorney General's Office, Special Operations, Medicaid Criminal Investigations Unit.
"The Medicaid Criminal Investigations Unit investigates fraud committed by Medicaid health care providers and the physical abuse of patients in the Medicaid-funded facilities. The unit investigates embezzlement, theft, violations of federal sanctions, and the improper commingling of patients’ funds in Medicaid-funded facilities.
A Medicaid provider includes any individual, corporation, or other entity, and their officers and employees, paid by Medicaid for providing a health care service. The Medicaid Criminal Investigations Unit works with NC Department of Justice attorneys, investigators, and auditors, all of whom are trained in the complexities of health care fraud investigation and health care fraud litigation. In addition, the unit works closely with United States attorneys, district attorneys, federal and state law enforcement agencies, and private insurance company fraud units."