The Ghosts of Unreported Provider FWA in Medicaid Managed Care
The Ghosts of Unreported Provider FWA in Medicaid Managed Care
The U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG) recently released a report focusing on the number of suspected provider fraud, waste, or abuse (FWA) referrals submitted by Medicaid managed care plans to their respective state Medicaid agencies in 2022, and the results were FRIGHTENING.
SPOOKY STATISTICS
According to the study, ten percent of the 337 Medicaid managed care plans responding to the survey made no referrals of potential provider FWA in 2022, despite covering 1.6 million enrollees and receiving $8 billion in payments from 13 states. Additionally, more than half of plans that did make provider fraud referrals reported making two or fewer referrals per 10,000 enrollees during 2022.
As industry experts, Integrity Advantage recognizes Medicaid managed care organizations (MCOs) play a critical role in detecting, preventing, and investigating suspected FWA. This responsibility is characterized by conducting proactive and advanced data analytics and maintaining requisite investigative knowledge and experience. Further, MCOs are federally required under 42 CFR § 438.608(a)(7) to promptly refer any potential FWA they identify to the State Medicaid Program Integrity Unit and directly to the Medicaid Fraud Control Unit (MFCU), if fraud is suspected. This requirement is reinforced in contracts between MCOs and the state.
So how can MCO justify minimal to no referrals made?
A CHILLING REALITY
HHS-OIG’s report highlighted that Medicaid MCO plans participating in training by the state or MFCU on the fraud referral process made more provider referrals. Still, only half of the plans surveyed reported that they received such training.
Recommendations from the report included increasing state-led training on the fraud referral process. We believe MCOs could consider implementing their own multifaceted approach to improve internal processes and thus, increase the frequency and quality of referrals.
The following best practices collectively improve referral quality and contribute to more efficient investigations and subsequent referrals.
🦇 Leveraging advanced data analytics tools can help identify unusual billing patterns and provider behaviors indicative of potential fraud or abuse driving an increase in actionable referrals.
🦇 Standardizing referral workflows and fostering proactive communication with state Medicaid agencies and MFCUs promotes timely and appropriate case handling.
🦇 Comprehensive staff training on FWA definitions, investigative techniques, and referral protocols ensures personnel are equipped to act decisively and accurately on such indicators and submit quality referrals.
DUST THE COBWEBS OFF OF DATA ANALYTICS
Medicaid MCOs should apply data-driven approaches to consistently uncover abnormal or suspicious trends in claims and provider behavior. Technology platforms that support FWA programs can perform pattern recognition, anomaly detection, and analyze connections among providers to flag potential cases.
While these data and analytics give FWA teams a strong foundation for inquiry, additional investigative work—including both detailed data analysis and qualitative review—is typically necessary to confirm and pursue these cases further. State and federal stakeholders rely on the additional insights MCO investigators can offer through medical records reviews, medical and payment policy interpretations, and recipient interviews.
ELIMINATE THE GRAVEYARD OF REFERRALS
This ensures that no FWA referral is left lurking in the shadows like a phantom, and state agencies can swiftly unmask and classify these spectral threats before they haunt the Medicaid program any further. If the state has a formal process, then Medicaid MCOs must ensure adequate understanding of the required fields and supporting documentation to effectively fulfill referral obligations. It is crucial that referral correspondence is accurate, clear, and reflective of comprehensive case documentation. By maintaining high documentation standards, MCOs enhance transparency, facilitate collaboration with oversight agencies, and strengthen overall program integrity.
Medicaid MCOs can also encourage collaboration by creating liaisons or dedicated contacts for direct coordination with state program integrity units for responding promptly to follow-up questions, status reports, and requests for additional evidence. This also facilitates the exchange of best practices, training, or process improvements.
TRICK OR TRAINING
Ongoing training and education are paramount for the sustained success of MCO FWA programs. Referral-related training should cover core topics such as updated regulatory requirements, evolving fraud typologies, effective investigative best practices, and state-specific referral procedures. MCOs may benefit from leveraging industry forums, webinars, and certifications focused on healthcare FWA compliance. Investing in these educational resources ensures that personnel remain well-equipped to identify and act on potential FWA, ultimately strengthening program effectiveness.
UNDERSTAND THE SCARY RISKS
Insufficient referrals of suspected FWA not only undermine Medicaid program integrity but also expose MCOs to significant operational and financial risks. When potential FWA cases go unreported, improper payments may continue unchecked, increasing program costs and reducing resources available for legitimate patient care. Furthermore, failure to comply with federal referral requirements can result in regulatory scrutiny, contract penalties, and reputational harm.
Reference the HHS-OIG Report Here
UNREPORTED FWA LURKING? ACT NOW
Invest in regular data analytics activities to identify potential FWA for referrals.
Standardize referral templates, including detailed claim evidence and metadata.
Employ dedicated FWA personnel and ensure team members receive periodic training to bolster referral skills.
Foster closer collaboration with state counterparts for ongoing process improvement.
This multifaceted approach—combining data, thorough documentation, knowledgeable staff, and coordinated communication—can substantially increase both the volume and quality of FWA referrals generated by Medicaid MCOs for state review and action. Every unreported referral is a hidden risk that can quietly escalate into a serious, ghostly threat to the Medicaid program’s integrity.
INTEGRITY ADVANTAGE IS YOUR ONE-STOP-SHOP FOR FWA SERVICES!
Integrity Advantage supports payers across the country with program assessments, data mining, lead generation, investigations, medical review, training and more! Our team has decades of hands-on experience across all lines of business, providing vendor-neutral, technology-enabled services that improve efficiency and boost ROI.
With more than 30 years of experience supporting payers, the team at Integrity Advantage provides healthcare fraud, waste and abuse consulting, outsourced investigations and medical record reviews for Special Investigations Units and other organizations fighting healthcare fraud. We are a certified Women’s Business Enterprise (WBE) and an Economically Disadvantaged Woman Owned Small Business (EDWOSB).
For more information click below, call us at 866-644-7799 or email info@integrityadvantage.com.