Dear Mr. Waguespack:The Louisiana Department of Health (LDH) acknowledges receipt of correspondence from the Louisiana Legislative Auditor dated February 6, 2023, regarding a reportable audit finding related to billing controls for behavioral health services. LDH appreciates the opportunity to provi...
Dear Mr. Waguespack:The Louisiana Department of Health (LDH) acknowledges receipt of correspondence from the Louisiana Legislative Auditor dated February 6, 2023, regarding a reportable audit finding related to billing controls for behavioral health services. LDH appreciates the opportunity to provide this response to your office's findings.Finding: Inadequate Controls over Billing for Behavioral Health Services.Recommendation: LDH management should implement adequate internal controls to ensure that encounters are coded correctly, which could include edit checks to flag potential improper billings for further review.LDH Response:LDH concurs.As noted in previous audit responses, LDH holds the Managed Care Organizations (MCOs) accountable for implementing necessary claim system edits, as identified in the FY2022 contracts between Bureau of Health Services Financing (BHSF) and each individual MCO. Further, the MCOs must incorporate all National Correct Coding Initiative (NCCI) edits to applicable claims, as well as have the ability to update national standard code sets such as Current Procedural Terminology (CPT)/ Healthcare Common Procedure Coding System (CPT/HCPCS), International Classification of Diseases Codes (ICD-10-CMS), and move to future versions as required by CMS or LDH.In order to meet the above requirements, the MCOs implement a variety of edits that are not dependent on the use of modifiers, including the use of information readily available through interfaces with their provider enrollment and service authorization data. The multiple systems that interface with the MCOs' claims processing systems assist in the validation of claims accuracy based on information such as the provider's qualifications and specialties, the appropriate fee schedule and/or contracted rate for which the provider is eligible, the number and types of services for which the recipient is authorized and the eligibility of the recipient for the service. This is the most effective way for the MCO to adjudicate the claims while reducing administrative burden and preventing provider abrasion. This results in the MCO not being dependent upon modifiers, which may or may not be valid, to process and pay these claims as clean, rather than denying and requiring unnecessary resubmission. The MCOs are also required to perform internal audit reviews to confirm claim edits are functioning properly.System edit checks are a critical function of ensuring the appropriateness of claims payments. However, these edits and functions should not conform to the standard Medicaid SBHS schedule in that this would interfere with the requirement to be adaptable to continuously changing provider specific agreements, out of network agreements, recipient specific agreements; in addition to the accommodation of all of the nuances related to billing and payment methodologies required and/or allowed in contract and as permitted via a variety of Medicaid programs and fee schedules.In reality, claims adjudication systems are incapable of accounting for every variable in a managed care environment that not only encourages, but also requires, flexibility related to alternative payment methodologies. These methodologies include incentivizing providers in rural and other areas with limited access to necessary services; in response to individual client cases in order to ensure that their person-centered medical needs are met, and defining payment rates based on outcomes and performance versus volume.While the managed care entity's independent claims system can accommodate a number of edits, an encounter repository system such as Medicaid's Data Warehouse is further limited as it would be impossible to implement uniform edits across multiple managed care entities which pay varying rates, offer varying services, hold unique provider specific agreements and offer provider specific incentives.Medicaid's Managed Care model places emphasis on efficacy and efficiency, which may not necessarily align with hard coded claims logic across multiple populations, providers and patients' varying medical needs. MCOs may offer additional benefits and rates that are outside the scope and fee of core State Plan benefits and services to individual members on a case-by-case basis, based on medical necessity, cost-effectiveness, the wishes of the member and/or member's family, the potential for improved health status of the member, and functional necessity.In a preliminary review of unique claim numbers provided by the LLA, OBH identified several instances where the SBHS fee schedule was not the source document and where the rate paid did align with the Medicaid rate on file. In reviewing data related to "Bad Modifiers", OBH found more than 5,000 encounters to contain no behavioral health diagnosis. Examples of questionable encounters include those for family practice physician clinics, neurologists, OME, newborn and well child visits, diabetes and hypertension diagnoses. Because Healthy Louisiana Plans pay both physical and behavioral health claims, manually sorting through encounters has shown a wide variety of services are being captured in the review. In combination with just a very small sample of physicians as identified through our partial review, we are questioning over 5,000 encounters totaling over $490,000.Corrective Action PlanLDH will continue to review best practices related to the independent claims processing systems of MCOs, and ensure compliance with and, as needed, development of, contract language to ensure due diligence on their part. Further, LDH has contracted with a third party through the LDH Medicaid office for expansion of the CMS External Quality Review, Protocol 5. While hard edits of encounters against the Medicaid fee schedule are not feasible in Managed Care due to the flexibility MCEs have in reference to payment methodologies for their contracted providers, the EQR will include validation of a representative sample of encounters against the Medicaid fee schedule on file at the time of service delivery, inclusive of modifier utilization .OBH will investigate any discrepancies in order to identify whether those encounters are reflective of an approved alternate payment rate or agreement versus a claim paid outside of the fee schedule, in error. MCEs will be responsible for addressing any erroneous claims inclusive of adjustments or necessary recoupments. Implementation of this protocol began in SFY 2022, with the first report covering the second quarter of the fiscal year that is the basis of this audit. The initial report is due prior to the end of SFY 2023.You may contact Karen Stubbs, OBH Assistant Secretary by telephone at (225) 342-1435 or by e-mail at karen.stubbs@la.gov with any questions concerning this matter.