$30 million in Medicaid savings found

A decimal point meant the difference between a bill to Medicaid for a 712-mile ambulance ride and the actual 71.2-mile ride. That error was one of many caught by a contractor, leading to nearly $30 million in savings for the state's Medicaid program.

Iowa Medicaid Director Jennifer Vermeer said the savings are about $7.5 million above the goal for the first two years of a $14 million contract with Optum, an information and technology health services business based in Eden Prairie, Minn.

“It really is important that we're generating these savings,” Vermeer said, citing Medicaid's growth. Because the $1 billion budget makes up such a large chunk of Iowa's general fund, she said, costs for the growing number of participants cut into services the state provides in schools, prisons and elsewhere.

Vermeer said the savings also reduce the need for health care services and provider rates to be cut, although that could be the alternative as costs escalate.

More than 400,000 Iowans are on the state's Medicaid rolls. The program operates on a $3.5 billion budget, 61 percent of which is from federal funds.

Vermeer said the integrity program savings are returned to the federal government and to Iowa's general fund. Including first-year savings of $23 million, more than $50 million has been saved or recovered overall.

The savings result from analyses of claims submitted by major Medicaid providers, with most due to claiming errors. One strategy screens claims for inadvertent errors that would make Medicaid pay for a more expensive procedure than was actually performed. Another ensures that Medicaid is reimbursed when an insurer eventually pays for the same hospital visit or procedure.

Vermeer said hundreds of thousands of dollars have been saved or recovered when analysts discovered fraudulent claims. Medicaid has referred dozens of providers to the fraud investigation unit of the Department of Inspections and Appeals.

“Actual fraud remains a fairly small percentage, but we have a zero tolerance for it,” she said.

The misplaced decimal point for the ambulance ride was considered a billing error.

Other examples included:

• Hospital readmissions: Hospitals can save money if they can quickly discharge a patient, but premature release sometimes leads to another admission for the same issue in a few days. In these cases, Medicaid now pays for a less-costly continuation of the first admission.

• Questionable dental claims: Analysts discovered claims for root canals on teeth that had been pulled months or years earlier. They also discovered claims for partial dentures for people who had received full dentures previously. One case was referred to the fraud unit.

• Questionable chore claims: People eligible for Medicaid-paid nursing home care can sometimes remain in their homes if they have help with chores like lawn mowing and snow removal. Program integrity analysts discovered that some chore providers billed for snow removal on days that it did not snow, or billed excessively for mild snowfall.