Arkansas Medicaid Program Wins Vendor State's Quality Achievement Award

Officials from numerous state Medicaid agencies Tuesday warned members of a congressional panel that more funding and revamped technology are needed to combat the billions of dollars lost every year as a result of fraud.

Some state Medicaid agencies are critically underfunded and rely on 20-year-old computers to detect and track fraud, forcing the agencies to seek the help of the private sector in identifying and recovering money from fraudulent claims, Medicaid officials told members of the House Commerce Committee's Oversight and Investigations Subcommittee. In fact, Medicaid may have lost as much as $17 billion to fraud and abuse during fiscal 1998, according to reports issued by the General Accounting Office.

Kentucky is one state that has enlisted the help of a third party in detecting and recouping the millions of dollars lost to Medicaid fraud and abuse. Kentucky selected Cambridge, Mass.-based HealthWatch Technologies LLC, which offers a full line of Medicaid fraud-detection services ranging from identifying overpayments to the recovery of funds, said Mitchell Adams, the company's chief executive officer.

Kentucky and 46 other states have medicaid fraud control units (MFCUs) that investigate and prosecute allegations of Medicaid fraud and patient abuse or neglect. MFCUs across the country boast an impressive track record of uncovering and successfully prosecuting fraud cases, but they are lagging behind in technological resources and funding, said John Hartwig, deputy inspector general for investigations at the U.S. Department of Health and Human Services. The Office of the Inspector General at HHS is responsible for overseeing the funding and operating standards of the 47 MFCUs.

Adams testified that HealthWatch provides all of the necessary hardware and IT services, including analyzing data, identifying specific fraudulent claims, presenting the data to prosecutorial authorities and recovering the funds for the state, but the company receives no compensation unless the state recovers overpayments, he said.

"Working closely with the staff of Kentucky's Department of Medicaid Services, our team has identified specific overpayments in excess of $14 million, most of which we believe can be recouped by our team for the commonwealth over the next several months," Adams said.

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