" "

How we work

To ensure we meet our goals, the Health Care Authority (HCA) conducts a variety of state and federal audits. We also conduct reviews to assure appropriate disbursement of Washington State's Apple Health (Medicaid) funds.

Audit process

The following items chart the processes used by HCA.

Algorithms

Algorithm is a form of data mining that applies complex rules-based filters to claims data. The purpose is to identify payments that Health Care Authority (HCA) may have made in error.

To perform its ongoing program integrity work, HCA's Payment Review Program (PRP) utilizes the services of Optum, a national health care services company.

PRP and Optum develop algorithms and other analytics and tools to ensure claims have been paid accurately and properly—in accordance with Washington payment rules and national coding standards.

Our analytics activities survey the broad spectrum of services paid by HCA as well as social service payments.

All of Optum's work is performed at the direction of HCA management. Compensation is not based on a contingency or pay-for-performance basis.

Overpayments identified through algorithms are processed in accordance with Washington administrative procedures.

Recoveries are managed by HCA with support from Optum. Providers who receive a notice of overpayment have the right to a formal administrative hearing, but can also seek informal resolution through Optum's provider relations specialist.

Federal Deficit Reduction Act (DRA) of 2005

The DRA applies to any entity receiving or making annual Medicaid payments of $5 million or more. Entities are required to establish and adopt written policies about federal and state false claims laws for all its employees, contractors and agents.

All programs and providers receiving Medicaid and Medical Assistance funding are subject to the False Claims Act, provided the provider receives $5,000,000 in payments annually, under a single TIN/FEIN (Tax Identification Number/Federal Employer Identification Number). These policies and procedures are primarily used and enforced by HCA's Section of Program Integrity and the DRA program manager.

Each year HCA's DRA program manager completes data runs to show which providers have made $5 million or more, under one TIN/FEIN. Providers are then notified to complete their attestation form and to send them to the agency.

A sample of these identified providers is also selected to send in copies of their policies and/or teaching materials regarding the False Claims Act to ensure they have the required policies in place.

State False Claims Act

In 2012, the Washington State Legislature passed the Medicaid False Claims Act, which funded two specialized positions with the Health Care Authority (HCA). The HCA investigators follow leads, mine data, and prepare fraud referrals for the Medicaid Fraud Control Unit (MFCU) of the Attorney General's Office, for both civil and criminal prosecution.

Federal Audits and Reviews

Recovery Audit Contractor (RAC) audits

In 2012, the Health Care Authority selected CGI Federal as its Medicaid Recovery Audit Contractor in a new federal effort to review Medicaid payments and identify payment errors - both overpayments and underpayments - as part of the Affordable Care Act. A key feature of the Recovery Audit Contractor program is that its reviews will be based on the state's data, not federal extracts. The state's contract with CGI Federal ended in June 2014. The HCA currently has an exception from CMS to evaluate the procurement.

(CMS) Payment Error Rate Measurement (PERM) reviews

PERM uses a 17-state rotational approach to measure improper payments in the Medicaid and Children's Health Insurance Program (CHIP) for the 50 state and the District of Columbia over a three-year period. As a result, each state is measured once every three years. The state will notify providers who are selected to be part of the PERM review. Providers will be contacted by the PERM contractor with a request for records.

For more information, see our frequently asked questions (FAQ) about PERM.

Unified Program Integrity Contractor (UPIC) audits

In February 2006, the Deficit Reduction Act (DRA) of 2005 was signed into law and created the Medicaid Integrity Program (MIP) under section 1936 of the Social Security Act (the Act). CMS has two broad responsibilities under the MIP.

  • To hire contractors to:
    • Review Medicaid provider activities.
    • Audit claims.
    • Identify overpayments.
    • Educate providers and others on Medicaid program integrity issues.
  • To provide effective support and assistance to States in their efforts to combat Medicaid provider fraud and abuse

UPIC works with the HCA's Section of Program Integrity (PI). They conduct audits that examine payments made to individuals or organizations providing services or items. In the course of these audits, medical documentation and other supporting information will be reviewed for paid Medicaid claims of services or items furnished. As appropriate, the audits may result in the identification of potential overpayments.

Site Visits

The HCA performs unannounced on-site visits of moderate or high risk providers when requesting enrollment in the Apple Health (Medicaid) program (Title 42 Part 455). We also perform unannounced on-site visits of currently enrolled moderate or high-risk providers during the re-validation process. A list of moderate to high risk provider specialties is listed below.

Unscheduled and unannounced pre- and post- enrollment site visits help ensure that suppliers are operational and meet applicable standards or performance standards.

In addition, unscheduled and unannounced pre- and post- enrollment site visits are a tool in determining whether a provider or supplier is in compliance with its reporting responsibilities, including the requirement in the Core Provider Agreement under Section 4:

  • Disclosure to notify the Medicaid agency of any change in address or telephone number.

Other standards that can be verified through site visits include:

  • Records storage.
  • Inventory.
  • Posted sign and hours of operation.
  • 225100000X - Physical Therapist
  • 332B00000X - Durable Medical Equipment & Medical Supplies
  • 335E00000X - Prosthetic/Orthotic Supplier
  • 251E00000X - Home Health
  • 341600000X - Ambulance
  • 291U00000X - Clinical Medical Laboratory
  • 293D00000X - Physiological Laboratory (Independent Diagnostic Testing Facilities)
  • 335V00000X - Portable X-ray Supplier
  • 251G00000X - Hospice Care, Community Based