Washington State Failed to Suspend Payments to Medicaid Providers Accused of Fraud

Lack of action put Medicaid funds at risk

Wikimedia Commons
• September 8, 2015 2:20 pm


The state of Washington did not suspend payments to numerous Medicaid providers who had been accused of fraud, putting state and federal funds at risk, according to a new government report.

The audit, released by the Office of Inspector General of Health and Human Services, reviewed Washington’s Medicaid payment suspensions in accordance with Obamacare and found that the state failed to act in several cases involving potentially fraudulent providers.

The state, the report said, "repeatedly failed to suspend payments because it did not follow its policies and procedures." Written policies and procedures to suspend Medicaid payments to providers who had credible allegations of fraud against them were not in place, according to the report.

The audit found that of the 81 providers who posed a risk of fraud, the state suspended Medicaid payments to 33. Payments to the remaining 48 providers who raised red flags were not suspended, an action required by federal regulations.

One such provider was the subject of an ongoing investigation into possible fraud in October 2014, but it continued to receive payments from the state. The provider received $1,588—$794 of which came from the federal government—in payments that were not eligible for federal reimbursement.

The state also failed to suspend 47 providers that together accounted for $989,766 of Medicaid payments before investigations or legal proceedings were finished. The federal government’s share of these questionable payments was nearly $500,000.

Only one of the providers was ultimately found guilty of Medicaid fraud. The Fraud Control Unit found "insufficient evidence" for the other 46. However, the failure to suspend providers before the investigations were completed put Medicaid funds at risk and went against federal regulations, according to the report.

"Federal regulations require a State agency to annually report to the Secretary of Health and Human Services summary information on credible allegations of fraud, including payment suspensions and good-cause exemptions," the report said.

"The State agency did not report to CMS summary information on good-cause exemptions and Health Services’ payment suspensions," it continued. "Specifically, the State agency did not include any good-cause exemptions in its Medicaid payment suspension report for Federal fiscal year (FFY) 2012. In addition, the State agency did not include the required summary information from Health Services on payment suspensions in its reports to CMS for FFYs 2011 and 2012."

State personnel in charge of oversight were found not to have been familiar with the good-cause exemptions and other aspects of the reporting process.

Washington was not alone in failing to meet requirements related to Medicaid fraud, according to previous reports.

Earlier this year, a report found that Ohio did not comply with federal requirements in its review of cases involving allegations of fraud. Pennsylvania and Minnesota, on the other hand, were found to have met these requirements.

Published under: Medicaid, Washington