The press has uncovered a lot of conduct unbecoming at the Texas Health and Human Services Commission and its Office of Inspector General in the last eight months.
First there was the Sunset Advisory Commission with its damning report on OIG and its treatment of Medicaid providers, its poor handling of investigations and lack of due process. Then, the 21CT scandal surfaced with former HHSC chief counsel and OIG deputy inspector general for enforcement Jack Stick resigning. After a concatenation of further revelations, investigations and resignations, finally, Kyle Janek, the executive commissioner, resigned a few weeks ago.
But is that the end? No, there is apparently more in the HHSC closet. For instance, the agency spurned advanced Medicaid fraud detection software that was offered to the state free of charge back in 2011 and threatened to sue the company offering it.
The background
The Governor’s Health and Human Services Commission Strike Force noted in its report that a number of firms had provided “proof of concept” demonstrations of their Medicaid fraud detection software prior to the awarding of the no bid 21CT in 2012.
The companies named were Reflective Medical (RMIS), HealthCare Insight (HCI), LexisNexis and SAS. While the media had already reported this and filed open records requests with HHSC to obtain those companies’ proof of concept reports, those reports still have not been released.
Highly decorated FBI agents reviewed Medicaid data
However, TDMR talked to one of the vendors – David Gibson, the CEO of Reflective Medical. RMIS is an organization which includes highly decorated, retired FBI special agents experienced in investigating white collar criminals involved in Medicaid fraud.
Gibson made comments that indicate not all the skeletons have been outed from HHSC and OIG’s closets dealing with these “proof of concepts” provided to HHSC back in 2010 and 2011.
Gibson talked to the Austin press last December after the 21CT scandal broke and told about substantive management inadequacies in Texas Medicaid. However, there are more details.
HHSC couldn’t track Medicaid eligibility leading to totally erroneous program recipients
First of all, he said that accurate eligibility files are the core requirement for preventing fraud but “we found that the HHSC couldn’t track which Texans are eligible for services under Medicaid, where they live, their genders or their medical conditions.” For example, he told TDMR that:
- The Medicaid demographic file they reviewed had a list containing forty-eight eligible Medicaid beneficiaries over the age of 115; these ranged from 116 to a high of 196. Implausibly, they found 11,641 Medicaid beneficiaries to have a recorded age above 99 years.
- Out of the total number of member records delivered to RMIS, about 6 million were found to be missing address information (blank addresses were provided).
Medicaid payments for totally erroneous conditions
Further, he explained that RMIS found a series of “never events” that were paid for by the Texas Medicaid program during the 3-month period encompassed by its proof-of-concept study. These included:
- Male procedures on females that were paid for by the Texas Medicaid program. These paid for procedures included removal of the testis, circumcision, biopsy of the prostate, etc.
- Female procedures performed on males that included biopsy of uterus lining, care after delivery, care of miscarriage, etc. In the 3 months analyzed they found 101 paid claims for pregnancy-related procedures performed on male members.
- Girls under 10 years who had claims paid for suspension of vagina, care after delivery, dilatation of vagina, etc.
Couldn’t track if a program beneficiary was dead or incarcerated
Per Gibson, RMIS could find no evidence that HHSC checked public records to determine if a beneficiary was deceased at the time of service or if the beneficiary was incarcerated and therefore covered for medical services within the penal system.
Gibson said the unreliability of the demographic data in the eligibility files provided an open portal for thieves to access the program’s funding and bill for services never rendered.
Estimated that up to 25% Medicaid spending might be fraudulent
Based upon their analysis, RMIS told TDMR they estimated that as much as a quarter of the state’s annual Medicaid spending was likely diverted to pay for services never rendered.
RMIS offered Texas free use of advanced fraud detection software
As a result of its findings, Gibson said RMIS offered back in 2011 to give the Health and Human Services Commission Office of Inspector General free use of the RMIS’ advanced proprietary software to uncover Medicaid fraud.
Offered to track down and bring to prosecution offenders at no cost to the state
It also offered, in coordination with its not-for-profit affiliated Fraud Prevention Institute, to, at its own cost, track down and bring to prosecution those individuals its software targeted as committing Medicaid fraud.
Gibson said this RMIS/FPI proposal was offered to save the state from having to hire more investigators. The business model for the offer involved reimbursing RMIS with prevented spending on false claims by Medicaid going forward. Gibson explained his organization made this offer because it is composed of experienced fraud investigators who have a high degree of concern about the long term sustainability of Medicaid.
HHSC response: A threat to sue RMIS
However, per Gibson, HHSC didn’t want to address these issues and threatened to sue RMIS if the company released its report or showed it to the legislature or the governor’s office which were responsible for HHSC’s performance oversight.
Texans right to know
Texans have a right to know these details, considering the vast multi-billion dollar budget of HHSC and the mismanagement and scandals that have rocked that agency since the end of last year.
Based on RMIS’s experience, the public to should know what is in the reports of the other companies that provided HHSC “proof of concept” for their Medicaid fraud detection software before Jack Stick and 21CT came on board.
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