Data Driven: Medicaid’s Inspector General Focuses on Fraud Prevention, Not Just Prosecution
By Amy Lynn Sorrel Texas Medicine September 2021

Medicaid Card

Since her appointment in 2018, Texas Health and Human Services Inspector General Sylvia Hernandez Kauffman has homed in on using data analytics not only to prosecute fraud, waste, and abuse within the Medicaid program, but also to prevent it from happening in the first place. 

Texas Medicine spoke to Ms. Kauffman about what appears to be a shift in tone from this department as it also focuses on using the data it collects to educate physicians and other health care professionals on common billing mistakes. As part of that effort, in the pages following this interview is a contributed article from the Office of Inspector General (OIG) taking a look at telemedicine billing. COVID-19 prompted an increased use of telemedicine, and as Ms. Kauffman acknowledges, accompanying regulatory changes have meant a learning curve for both physicians and OIG. Below is an edited version of the interview.

What has been your vision and philosophy for OIG? 

When I first got here, OIG had an unfriendly relationship with providers. So, our goal was to make sure that we have a focus on prevention, and make sure that we are very clear when we do our investigations, our audits, and inspections, that we have a very clear reason and make sure that we use data. So, data is a very important part of what this agency is doing. There’s a lot of data out there, and we have the ability to use that data to really home in on the bad actors because we understand that the majority of providers out there, especially physicians, are doing a great job. They’re doing this job because they want to help people. Medicaid rates are not that high, but [physicians are] in Medicaid, and they want to make sure that they help people. So we want to make sure that we use data to really focus on who’s not doing a good job, and let everybody else do their job the way they’re supposed to be doing it without administrative burdens. So, prevention and really just being data-driven, those were my two priorities.  

One concern physicians have had in years past was that investigations would drag out. Are you able to better communicate the status of a case? 

We understood cases were taking a lot of time, and we built dashboards so that we understand who has the case, what phase of the investigation it is in, what phase of the litigation or the enforcement action it is in. And now we know we have this number of cases; therefore you need this number of lawyers, maybe we need more resources. I have assembled a team of people I’m so proud of, and together we’ve really turned this agency around. They have constant communication and work very closely with the provider.  

Another past concern of physicians was that data was extrapolated and provided an inaccurate picture. How are you using data in a positive way, and can you allay doctors’ fears that it won’t be used in a negative way? 

My understanding is in the past, any kind of nitpicky thing found was extrapolated into a huge number, so we are very clear with our teams that that is not what this office does. We reserve extrapolation for very egregious violations, and we use it very sparingly. We use data to make sure that we understand, who are those providers that are billing outside the normal pattern. We did a study of 5,000 providers using different algorithms, and we did a scatter plot to identify which providers are really outliers, and which ones are in the normal realm of proper billing. It turns out that around 10% of providers are red dots (outliers) … and the majority are just doing their job. My goal is to continue to use data to identify those red dots and then focus our resources on those dots. It was interesting after we did that review, we looked and we already had investigations open on all of those (red dots) because [already] there had been complaints, or concerns from an MCO (managed care organization), or referrals. But our goal is to really use data not just for investigations and identifying the outliers, but internally as well to identify where are we with an investigation and how are we doing.  

Are you able to work with physicians on a repayment plan or an education effort, for example, as opposed to simply imposing a penalty?  

Staff understands that our goal is to be fair, reasonable, respectful, and consistent, and to treat everybody with the respect that they deserve. Once we have the full evidence that says somebody did something wrong, then we figure out what enforcement action is appropriate. But until then everyone deserves to be treated the same way.  

What are some of the most common mistakes you see? 

The top three I’m aware of are: Upcoding – and a lot of times it’s that [billing staff] are just not trained properly, and they don’t understand how to bill. Another one that we see a lot is billing for a service that wasn’t rendered – and that one is pretty common across the board. Sometimes that could be an indicator of fraud if we see it happening a lot. We called it “ghost claims.” Still, just because the data tells you something is not right, we still want to go in and get the records and make sure that we do our due diligence and make sure people have their due process before we accuse anybody of anything. The third one is not having proper authorization, [for example, the physician doesn’t] have the proper medical record or doesn’t properly document what had occurred. So, there’s a disconnect between the medical record and the claim, and the support [for the claim] doesn’t exist.  

If a practice were to discover a mistake, you can understand a physician might be apprehensive to report it. What would you advise? 

[OIG] has a self-reporting process, and we strongly encourage providers to go through that process because it’s a very fair process. They come in and they tell us they identified this amount of money that I’m billing incorrectly, and then we take a look at it and we work with them. And it’s a mitigating factor [that may warrant less severe action] for them to come and work with us – we take that into consideration when we work on the actual enforcement action. The majority of the time, they just have to pay it back. We had a hospital provider that [self-reported]. They were a little nervous because they’ve never done this before. We worked with them, and the number that we came up with was very different from their number. [We advised they get an outside] audit of the claims and make sure that we come to some agreement. Well, they came back, and their number was still low, and we said, “OK let’s do something else. Let’s pick a random sample.” They picked the even claims, we kept the odd ones. And then we said, “OK let’s swap.” And then we came to a really close [number], and we were able to settle on that amount. Again, everything [we do] is working very closely with the provider. [In this case], the provider was happy with the outcome, and they felt it was fair and respectful. So, we strongly encourage people to come and work with us because again, it’s a mitigating factor we consider in the enforcement action. 

What if a physician has a concern with an MCO and is reluctant to come forward? 

No. 1, I would encourage them anytime they see anything that makes them worried, they should definitely come let us know. But I want to make sure that people understand: Everything that we do is data-driven and referral-driven. If someone comes in and complains, we look at the data. We want to make sure people understand that just because they filed a complaint against an MCO or Medicaid, it is not going to trigger anything from this office.  

Are MCOs upholding that same message? 

We do have a partnership where we work with them and make sure that they share our philosophy that everyone deserves due process, and you shouldn’t investigate someone because you don’t like them – that’s just not how things should operate. It should be based on clear criteria. It should be based on referrals and data. And that’s how we work with them on this. We come together, we talk about different schemes that people are seeing. And the bottom line is, we need physicians in the system. There’s not enough, so we just have to be fair and consistent with them, and as long as we do that, I think providers will continue to work in the system. 

With the pandemic having changed a lot with regard to telemedicine – flexibilities, waivers, new codes, etc. – how are you looking at telemedicine and keeping all of those moving parts in mind? 

First of all, I think personally telemedicine is awesome, and I think it’s great for the state of Texas to be moving in that direction. We are working with the federal government and other state partners to identify the patterns that people are seeing in terms of billing behavior around telemedicine. But the key thing that our office is doing is working directly with each of them on what we’re calling our “COVID initiative,” and making sure that we understand how people are using telemedicine, and how did the health care landscape change. Especially with the pandemic, we have to have a certain number of years of data [before] we can really see a trend. So, all the states and the federal government are just waiting to see what the data is showing, and then once we see those trends in the data, work with providers to [determine], is this a bad trend, or is this a good trend. We have met with a lot of the associations – TMA, the hospital association, the DME (durable medical equipment) group, personal care attendants. We’re meeting with the MCOs as well. Everybody was a little bit nervous at first, but once we explained to them that our goal is really prevention and to make sure  before we take any action that we understand what is really happening out there, people were very helpful and really appreciate the conversation.  

Is there a timeline for when you will release results or guidelines? 

We started right around January because we had enough data to start looking at some of the trends. We still need a little bit more time to really look at the data and meet with everybody, so I would anticipate sometime in this next year. 

How have other facets of the pandemic affected your office? 

One of the things that was very obvious to us is how important it is to be adaptable because the pandemic changed everything for everybody. In terms of providers themselves, we were able to give everybody extra time on our audits and investigations. We implemented payment plans for providers if they already had an enforcement action and were paying it back. And now we will see after the pandemic. We’re studying all the data to see what are some of the changes that we’re going to be able to implement based on that data.  

Amy Lynn Sorrel is associate vice president of editorial strategy and programming.  

You can reach her at (800) 880-1300, ext. 1384, (512) 370-1384.

TMA COVID-19 Billing and Coding Resources

Tex Med. 2021;117(9):38-41
September 2021 Texas Medicine Contents 
Texas Medicine  Main Page  


Last Updated On

September 06, 2021

Originally Published On

August 31, 2021

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