Contractors Failing To Monitor Fraud at Some Mental Health Centers

Private contractors charged with monitoring and reporting fraudulent Medicare claims and other problems involving community mental health centers are falling short of their requirements in some fraud-prone states like Louisiana and Texas, according to an audit report released Tuesday by the HHS Office of Inspector General, Modern Healthcare reports.

For the report, OIG investigators analyzed 2010 data on Medicare administrative contractors or MACs -- which primarily process Medicare claims -- and zone program integrity contractors that focus on fraudulent activities.

According to Modern Healthcare, 206 community mental health centers nationwide in 2010 received $219 million for providing outpatient health services to 25,000 Medicare beneficiaries

Audit Findings

The HHS OIG audit found that MACs assigned to monitor mental health centers in Louisiana and Texas failed to monitor for fraudulent activity among the centers in 2010. In Florida, another fraud-prone state, fraud cases reported by MACs mainly were based on the work of a South Florida-based collaborative, targeted enforcement program.

Meanwhile, 90% of zone program integrity contractors' investigations in 2010 were focused on just one state -- Florida -- even though past research had detected high levels of questionable bills in Baton Rouge, La., and Houston, the audit found.

HHS officials acknowledged that while community mental health centers are particularly prone to Medicare fraud but said that recent efforts to monitor providers in high-risk programs and the adoption of predictive analytic technology to analyze Medicare claims in real time would help address the issue.

Acting CMS Administrator Marilyn Tavenner, in a response to the audit report, said, "CMS is building reliable models" in the agency's Fraud Prevention System that can detect and generate alerts for suspicious billing behaviors by all major provider and supplier types, including community mental health centers (Carlson, Modern Healthcare, 1/15).