Spotting Medicaid waste and abuse

New Jersey officials say the push to crackdown on Medicaid cheats is paying off.

New Jersey officials say the push to crackdown on Medicaid cheats is paying off. [audio:100312tefraud2.mp3]

A year ago, New Jersey created an independent office to fight Medicaid fraud. Medicaid Inspector General Mark Anderson leads investigators, number crunchers and lawyers who try to identify and prevent waste and abuse. He says his office flagged $269 million in Medicaid abuse in 2009.

Anderson’s team is paying close attention to the adult day care industry, pharmacies and self-employed workers who claim they have very low income in order to qualify for state-sponsored health insurance.

Anderson: So the self-employed person may own a dry cleaner in one part of the state, maybe a restaurant in another part, and making, really, a good amount of money and living in a $600-$700,000 home, but is on Family Care. Now, those are situation where, potentially, that recipient is hiding income.

Anderson say one of out every six dollars in the New Jersey state budget is spent on Medicaid-related services such as Family Care or the Children’s Health Insurance Program. So, he says, protecting those dollars is critical.

Anderson: We can’t go after every single person, but if we can have a deterrent effect on those providers and recipients who are thinking about turning bad, they may say: ‘You know what, may be not.’

Anderson says auditors also slice and dice data to spot irregular billing trends.

Linda Murphy leads anti-fraud efforts for the Medicaid system in Delaware.

Murphy: We identify clients with other insurance, so that Medicaid is the payer of last resort. We review claims with possible problems to determine if payments should be made on those claims, and we also identify and investigate suspected provider fraud and abuse.

Murphy says Medicaid is designed to be safety-net health insurance for poor and disabled people. But experts says as the system became bloated and complex, it also became vulnerable to people looking to defraud the government.

President Obama’s latest health reform push includes several anti-fraud proposals.