Dentaquest, MCNA Recover $303,000 in Fraud, Abuse from $1 Billion Revenues in 2014

Texas Medicaid fraudToday, HHSC-OIG issued a report detailing amounts recovered by state managed care organizations for certain fraud and abuse in state fiscal year 2014.

22 MCOs recover $3.8 million 

The report entitled “HHSC OIG Annual Report on Certain Fraud and Abuse Recoveries by Managed Care Organizations (MCOs) – SFY 2014” shows that  22 MCOs recovered and kept some $3,883,524.81.

There is no indication in the report exactly which HHSC programs are covered by the report or if it represents the totality of MCO recoveries since the report title is vague. However, for purpose of volume comparisons, it will be assumed that the report is representative of amounts covered under Medicaid, CHIP and TANF and it is the full amount of recoveries.

Those programs represent an almost $24 billion per year expenditure in 2013, per the Texas Sunset Advisory Commission staff report.

Two DCOs recover $302,000 from over $1 billion in net revenues

As far as the two dental managed care organizations are concerned, they recovered together a total of $302,848.56 per the report, on net revenues of over $1 billion.

Dentaquest reported recovery of $277,597.69. Dentaquest’s net revenue for state fiscal year 2014, according to an HHSC Financial Statistical Report (FSR), was over $595 million. The amount recovered represents .05% of net revenue.

With MCNA, the company reported just $25,250.87 recovered on net revenues of $477 million in 2014. The recovered amount represents .01% of net revenue.

Figures low due to OIG involvement in cases

There is a footnote in the report that “Managed Care of North America and DentaQuest refer all their cases to OIG, therefore these MCOs report lower recoveries. This agreement was a result of an OIG initiative on dental and orthodontic providers.”

HHSC-OIG, per the Sunset Advisory Commission staff report, collected only $5.5 million itself relating to Medicaid fraud, waste and abuse for the entirety of the Medicaid program in 2012, 2013.

The Commission report stated:

Cost-recovery data from OIG does not show that the state is receiving an appreciable return on its investment in OIG. Specific to Medicaid provider investigations, OIG reports that it identified $1.1 billion in Medicaid provider overpayments in fiscal years 2012 and 2013, but only $5.5 million in provider overpayments was collected in that period of time. Overall, almost 80 percent of OIG’s $273 million total money recovered in fiscal year 2013 came from third-party liability collections, a data-matching function for other insurance payers that is not related to fraud, waste, or abuse and that, in many states, is housed within the Medicaid program, not an OIG.

Minus third-party liability figures, OIG’s cost-recovery efforts struggle to recover OIG’s costs, and the significant increase in OIG’s budget for fical year 2014 will only exacerbate this difficulty. Certainly, OIG benefis the state by deterring wrongdoing and encouraging compliance, but the tremendous investment begs the question of what the state gets, or could get, in return.

It is not known how much OIG collected in 2014 relating to dental Medicaid fraud and waste.

Found and collected $0 in 2012

The 2014 amounts reported by MCNA and Dentaquest are larger than the amount reported for 2012 – zero.  There does not appear to be a similar report online for 2013.

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