Medicaid audit changes proposed

The Health and Human Services Committee heard testimony Feb. 26 on a measure that seeks to improve transparency and oversight in Nebraska’s Medicaid auditing system.

Medicaid program integrity audits are intended to ensure that Medicaid payments are for services that were provided and were billed correctly. LB381, introduced by Omaha Sen. John Fredrickson, would make several changes to the process of auditing behavioral health providers by Medicaid program integrity contractors.

Among other provisions, the bill would require contractors to provide clear justification for an audit, provide detailed explanations of errors, allow for adjustments by the provider and for an appeals process. Any audit would need to begin within one year of initial payment for services, rather than the current four-year lookback period, and be completed within 180 days.

Fredrickson said he was contacted by behavioral health providers across the state regarding how integrity audits currently are conducted. Among other concerns, he said, providers have been asked to repay for services provided due to clerical errors rather than fraudulent billing — errors they were not given the chance to correct.

Fredrickson said the situation has forced many providers to no longer accept Medicaid patients or to close their practices altogether.

“Many [of these providers] are from areas of the state already lacking in mental health providers,” he said, “and leaving Nebraskans without access to this care is frankly unacceptable.”

Several behavioral health providers shared their experience with the auditing process, including Lindsay Kramer, a mental health therapist from Elkhorn. Testifying in support of LB381, she said providers are expected to follow subjective documentation guidelines that are not made publicly available to them.

Following a two year audit, Kramer said, she was asked to pay back thousands of dollars due to documentation errors based on “invisible standards.” During one of the audits, she said, the auditor refused to follow current state laws that restrict the number of records that can be requested over a four-year period.

“Providers like me are left powerless,” Kramer said. “We have no recourse [and] no protections — just endless audits and crushing financial penalties based on rules they make up as they go.”

Erin Masching, a licensed mental health practitioner in Omaha, also spoke in favor of the bill. She said she was required to pay back over $34,000 within 30 days due to insufficient detail in her documentation.

“I am still bleeding financially and trying to recover mentally from the audit,” Masching said.

Also testifying in support was Spring Landfride, a licensed independent mental health practitioner from western Nebraska. She said the bill would help fix unintended loopholes that allow contractors to exploit providers through questionable practices.

Audits are an important part of program integrity and are meant to help providers improve quality and compliance, Landfride said, but the current system is not working.

Drew Gonshorowski, director of Medicaid and Long-Term Care for the state Department of Health and Human Services, opposed the measure. The department is federally required to perform certain audits, he said, which often require examining documentation beyond the one-year look back period proposed under LB381.

Mark Collins, director of the Medicaid Fraud and Patient Abuse Unit in the Nebraska Attorney General’s Office, also testified in opposition. He expressed concern that the proposed one-year look back period would not give investigators enough time to uncover potential patterns of fraudulent behavior.

The committee took no immediate action on the proposal.