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Pennsylvania Medicare

2. Background. Our project began when the Bureau of Program Integrity (BPI) received an anonymous complaint that a provider was billing both Medicare and Medicaid for the same prescriptions and receiving payment from both sources.This allegation was substantiated through the PA Medicare / Medicaid

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Pennsylvania Medicare

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    1. Pennsylvania Medicare / Medicaid Drug and Biological Project NASO Conference Lexington, Kentucky August 23, 2006 Presented By: Norris E. Benns, Jr. Esquire, Director Pennsylvania Department of Public Welfare Office of Medical Assistance Programs Bureau of Program Integrity

    2. 2 Background Our project began when the Bureau of Program Integrity (BPI) received an anonymous complaint that a provider was billing both Medicare and Medicaid for the same prescriptions and receiving payment from both sources. This allegation was substantiated through the PA Medicare / Medicaid Data Analysis Center (PMMDAC). BPI referred this provider for criminal investigation.

    3. 3 Background The role of the PMMDAC committee is to identify problems that cross both the Medicare and Medicaid programs, conduct research, and refer items for further action. Electronic Data Systems (EDS) is the Center for Medicare and Medicaid Services (CMS) Program Safeguards contractor for this project. Through the PMMDAC, BPI and EDS collected claims data for the Medicare dual eligible beneficiaries and performed a claim by claim analysis.

    4. 4 Background There are over 700 drugs and durable medical supplies covered by Medicare Part B. The recipients must meet a certain criteria for Medicare to pay for these drugs, with the diagnosis as a key component. These are some of the most expensive drugs covered under the Medicare and Medicaid programs and can cost thousands of dollars per prescription.

    5. 5 Background The number of Pennsylvania dual eligible recipients fluctuates between 250,000 to 300,000. This group has been growing at the fastest rate and uses the largest share of Medicaid resources.

    6. 6 Regulations and Guidelines Medical Assistance is the payer of last resort. (Federal Statute 42 U.S.C Section 1396a(a)(125)) The Pennsylvania Department of Public Welfare is required to recover payments made on claims for which other coverage was available.

    7. 7 Regulations and Guidelines Pennsylvania Medicaid 55 Pa. Code 1101.64(a) Third Party Medical Resources (TPR) states: Other private or governmental health insurance benefits shall be utilized before billing the Medical Assistance Program. When the total amount of payment by a TPR is less than the Departments fee or rate for the same service, the provider may bill the Department for the difference by submitting an invoice with a copy of the third partys statement of payments attached.

    8. 8 Regulations and Guidelines: Medicare According to HGSA Administrators Part B Reference Manual, Chapter 5 In 2005, Medicare Part B beneficiaries enrolled in the traditional fee for service (FFS) program, the beneficiary is responsible for a monthly premium of $78.20. Additionally, the beneficiary is required to meet a $110 annual deductible. The deductible is applied based on the calendar year in which the services were rendered.

    9. 9 Regulations and Guidelines: Medicare Medicare Part B generally pays 80% of the approved charges, the 20% balance (known as the co-insurance) is payable by the patient or their co-insurer. In these types of situations, Medicare is always the first payer.

    10. 10 Regulations and Guidelines: Medicaid Medicaid is a health insurance program jointly funded by the state and federal government, which provides medical aid for people who are unable to finance their own medical expenses. If a person were eligible for both Medicare and Medicaid, the claim should be submitted to Medicare first! For dual eligible beneficiaries, the Medicaid payment is the difference between the Medicare paid amount and the Medicaid allowed amount.

    11. 11 How Medicare Pays for Drugs Medicare pays for certain drugs using the HCPCS (HCFA Common Procedure Coding System) procedure codes. These are often represented by J codes and Q codes in Medicare. The payment rate is 80% of the allowed amount.

    12. 12 How Medicaid Pays for Drugs Medicaid claims are billed in a National Council of Prescription Drug Program (NCPDP) 5.1 format which requires the use of a NDC (National Drug Code). Medicaid pays the allowed amount less the co-pay for patients with no other insurance coverage. For patients with a TPR, the payment amount is the difference between the Medicare paid amount and the Medicaid allowed amount.

    13. 13 The Problem The Medicaid claims processing system does not recognize Medicare as a third party resource (TPR) for pharmacy claims. As a result of the different way Medicare and Medicaid claims are billed, duplicate billing and payments from both resources goes undetected. Prior to Medicare Part D, very few drugs were covered by Medicare.

    14. 14 How Overpayments Occur The Medicaid claims processing system relies on the provider to report Medicare as a TPR. For example, a traditional FFS Medicare beneficiary with no other TPR, the drug Recombinate, 1000 units would be $1,290 ($1.29 per unit X1000) no matter what the cost billed by the provider.

    15. 15 How Overpayments Occur Medicare generally pays 80% of this allowed amount. In this case it would be $1,032. The beneficiary would be responsible for the remaining 20%. In this case, $258. There is a potential for overpayment with providers who treat dual eligible beneficiaries because no crossover exists with the drug fee and the Medicaid allowance is higher than Medicares allowance.

    16. 16 How Overpayments Occur For Recombinate, Medicare would allow $1.29 per unit and pay the provider 80% for this fee schedule. The provider would then bill Medicaid their usual and customary fee of $1.40 per unit. For a dual eligible, the provider should include the amount reimbursed by TPR. In the event of a TPR denial, the provider is to code the claim that the TRP was attempted but denied.

    17. 17 How Overpayments Occur The Medicaid claims processing system calculates the difference based on the NDC and the quantity used. Medicaid pays $1,400 for 1000 units of Recombinate. Medicare pays $1,290 for 1000 units of Recombinate.

    18. 18 What We Have Found As a result of data analysis, three payment vulnerabilities for dual eligible beneficiaries have been identified: 1.) Billing both Medicare and Medicaid and receiving payment from both sources. 2.) The pharmacy bills Medicaid and the physician bills Medicare. 3.) The pharmacy bills Medicaid instead of Medicare.

    19. 19 Review Process Coordinate with EDS through PMMDAC to identify claims for duel eligible recipients. Compare Medicare claims to Medicaid claims through the claims processing system. Identify all providers that have billed. Verify that the provider is eligible to bill Medicare. Generate a paid claims report for each of the identified providers.

    20. 20 Review Process Limit the report to the NDCs that are covered by Medicare Part B. Limit the report to dual eligible recipients. Limit the report to claims that are coded to indicate no other payment sources were attempted or collected. Verify that the identified Medicaid claims were also billed to Medicare.

    21. 21 Moving Forward BPI, in close cooperation with DPWs Office of General Counsel, has prepared a letter that will be sent to providers who have billed Medicare instead of Medicaid. BPI intends to recover the funds paid inappropriately by the Medicaid program. The Physicians who are identified as billing for the cost of the drug as well as the administration of the drug will be reviewed by BPIs Physician Review section for the appropriate follow up.

    22. 22 Moving Forward If BPI can identify a clear pattern of billing both Medicare and Medicaid, a criminal referral will be made through the PMMDAC committee. Pennsylvania is developing a change order to the claims processing system that will automatically deny payment for a dual eligible beneficiary if the coordination of benefits field is empty and the claim is not coded to indicate that it was submitted to but not covered by another TPR.

    23. 23 QUESTIONS?

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