Play Live Radio
Next Up:
Available On Air Stations
COVID-19 Coverage

Audit: Arizona healthcare system for low income not investigating fraud

Public health officials worry that the mostly low-income and immigrant populations served by community health centers aren't getting proper health care and testing.
Getty Images/Maskot
Public health officials worry that the mostly low-income and immigrant populations served by community health centers aren't getting proper health care and testing.

By Howard Fischer
Capitol Media Services
PHOENIX -- Arizona's healthcare program for low income is not doing a good job of investigating potential incidents of fraud or abuse committed by providers or patients, the state Auditor General's Office has concluded.
The new report finds that the Arizona Health Care Cost Containment System has taken more than a year to initiate or complete preliminary investigation of more than half of potential fraud and abuse cases that were open in May when auditors looked at the agency's records. And that, said Auditor General Lindsey Perry, comes at a cost.
``Untimely fraud and abuse investigations could result in AHCCCS making unnecessary payments,'' she wrote in the report. And Perry said there clearly are such cases.
She pointed out that in the last fiscal year, AHCCCS reported that it either recovered or saved about $48.1 million in state and federal funds. But Perry said if the agency doesn't investigate and resolve cases in a timely manner it ``potentially continues to pay thousands of dollars each year to provide healthcare coverage for a member who may have obtained this coverage fraudulently.''
But that's not the only problem.
``Untimely investigations could also delay efforts to recover fraudulent payments and make recovering improper payments more difficult,'' the report states. ``Finally, AHCCCS risks compromising its ability to gather evidence and follow leads that might become stale as cases age.''
The problems, the report says, are not limited to patients.
Perry said AHCCCS had not completed a preliminary investigation of 87% of potential provider fraud or abuse to the Attorney General's Office within three months, the time frame established in an agreement between the two agencies. In fact, nearly 60% had been open for longer than a year.
And she said AHCCCS has not reviewed the health plans, with which it contracts to provide direct services to patients, once every three years as required. Lindsey said that goes to the question of whether the agency is making ``incentive'' payments to providers for their performance without first determining that the providers actually are eligible.
AHCCCS, formed in 1982, is the state's Medicaid program.
Unlike some Medicaid fee-for-service programs that operate in other states, AHCCCS makes regular payments to provider organizations who, in turn, provide direct care to ``members.'' About 2.4 million Arizonans receive care under one of several AHCCCS programs, about 38% who are children.
Most of the estimated $21.4 billion cost is picked up by the federal government, with the $2.7 billion in state costs making it the largest item in the budget,
AHCCCS, in a response to the audit, said part of the problem was related to the COVID outbreak.
``Investigators were not able to conduct-in person visits to homes and schools as part of their investigations, which impacted their ability to verify the reported number of members living in the home and contributing to the household,'' the report said,
The agency said those visits resumed in January.
That, however, still left the issues of staff turnover and an insufficient number of investigators. And while the agency said it is bringing new people on board, it said it can take a year to properly train them.
Perry, however, said AHCCCS needs to do more.
She said the agency needs to conduct a workload and cost analysis to evaluate whether its funding and staffing levels are sufficient for timely investigating fraud and abuse incidents. And if it is not, Lindsey said, AHCCCS should work with the legislature to provide more funds.
The report found some incidents that auditors decided to single out for special mention.
One goes back to August 2014 with allegations that another adult was living in and contributing financially to the household. More to the point, the allegation was that had this person's income been included in the application, the household would not have been eligible for AHCCCS coverage.
Perry said that AHCCCS, as allowed by its process, did not assign it for investigation until October 2018.
But even then, she said, the agency did not complete its preliminary inquiry within the year as required under its policy.
But here's the thing: As of this past July, Perry said the case was still under investigation. AHCCCS said it was having difficulty in subpoenaing needed information from the member and the member's employer because the member had moved and changed jobs multiple times since 2014.
And, as of July, the individuals involved are still enrolled.
``As a result, AHCCCS has continued, for nearly eight years, to pay hundreds of dollars each every month in capitation payments for members who may be ineligible for healthcare coverage,'' Perry said.
On Twitter: @azcapmedia