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Medicaid: Eliminate waste and fraud but keep necessary services

Posted on March 25, 2010March 25, 2010 by Staff


VICKI SMITH

Few issues loom larger on the state public-policy agenda than Medicaid – the critically important public health insurance program for low-income children, seniors and people with disabilities (as certified by a doctor). At last count, the number of people served by Medicaid was nearly 1.8 million and rising along with the unemployment rate. Medicaid’s budget is one of the largest in state government – second only to the overall budget for education.

Recently, in the interest of cost cutting, Gov. Beverly Perdue announced a new initiative that will enhance state efforts to target people who are exploiting the state’s Medicaid system. Attorney General Roy Cooper “has agreed to prosecute those people once identified.”

On one level, this is welcome news. One of the biggest problems confronting Medicaid is the issue of cost containment, and the governor should be applauded for tackling the problem. The challenge she faces is how to control cost growth without harming the innocent kids, seniors and persons with disabilities who deserve coverage.

Unfortunately, similar recent efforts to target Medicaid waste and fraud have often backfired, casting a black cloud over all Medicaid providers and thereby punishing recipients, people with disabilities, particularly those who need mental health, developmental disabilities and substance abuse services (MH/DD/SAS.) Too often, allegations of “fraud” have led to the drastic elimination or modification of necessary services for many deserving Medicaid recipients.

Here’s a case in point: After an exposé by the News & Observer on abuses by some providers of a service called community support, the General Assembly completely eliminated the service. Throughout discussions at the General Assembly about the “runaway” costs of community support, there was little or no talk about what Medicaid recipients actually needed. While there were clearly problems in the implementation of the service, it did fill a void for many people with mental health diagnoses. The outright elimination leaves many un-served.

Medicaid dollars are predominantly federal; currently, the state pulls down three dollars for every dollar it puts up. We need to leverage those dollars to create a safety net for all Medicaid recipients. Every time we eliminate Medicaid funded services, we pay for it elsewhere with state or county dollars. Rather than simply cutting, we need to focus on proactively building a system in which people can be appropriately served and fraud is monitored on the front end.

As a taxpayer, I applaud any effort that ensures the state spends our tax dollars correctly. In fact, North Carolina is already required to do that when it come to Medicaid dollars. The state’s Division of Medical Assistance, which administers Medicaid, commits on its website “to provide access to high quality, medically necessary health care for eligible North Carolina residents through cost-effective purchasing of health care services and products.” And, because Medicaid is mostly federal dollars, the Centers for Medicare and Medicaid Services oversee the state’s administration of the program. At all levels, there is incentive to root out fraud and seek repayment where appropriate. But in a system where many are not appropriately served (as many agree is the case with MH/DD/SAS), we cannot afford simply to eliminate whole categories of services.

The governor’s plan should not just focus on the fraudulent actions of the past but also build a strong system of accountability and oversight. The plan’s goals should be to: (a) keep costs contained while providing the necessary services to eligible individuals, (b) provide more authority for DHHS to ensure greater accountability and oversight of what happens to Medicaid and state dollars as they pass through the state to local management entities (LMEs) that manage MH/DD/SAS and (c) strengthen requirements in the state’s contracts to LMEs about quality assurance. If done correctly, the increased oversight and requirements become protections for the consumers of services and protect the public interest.

Certainly, North Carolina should go after providers who game the system. But let’s also remember that there is a real need for medically necessary services. Let’s not stay so focused on provider actions that we end up with nothing. Focus instead on the state’s responsibility to provide proactive oversight. With proper oversight, eligible recipients will not be penalized for fraud and waste.

Vicki Smith is the executive director of Disability Rights North Carolina.

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