Medicaid Program Integrity Activities.
The Health Care Authority (Authority) administers the Medicaid program which is a state-federal program that pays for health care for low-income state residents who meet certain eligibility criteria.  Among the requirements that states and service providers must comply with under the federal program are provisions to submit information for the purpose of determining improper payments under Medicaid.  Other agencies besides the Authority use Medicaid funds, including the Department of Social and Health Services for long-term care for the elderly and persons with disabilities and the Department of Children, Youth, and Families for children and young adults with complex needs and significant behavioral health challenges.
 
The Authority is responsible for verifying entities' compliance with applicable laws, rules, regulations, and agreements through program integrity activities.  Program integrity activity methods include:  data mining, audits and reviews, investigations of suspected fraud and abuse, algorithms to identify irregularities leading to improper payments, on-site reviews and inspections, referral of enforcement actions to law enforcement agencies or licensing agencies, technical assistance and education, outreach to and education for entities and clients, and initiating and reviewing entity self-audits. 
 
The Authority also requires that managed care organizations comply with and enforce all program integrity requirements.  Managed care organizations must:  adopt and enforce program integrity policies and procedures; include and enforce program integrity requirements in their subcontracts and provider credentialing processes; adopt and implement methods for detecting and preventing fraud and waste to assure that payments are proper and comply with Medicaid standards; perform ongoing analyses to detect improper payments; conduct reviews, audits, and investigations of subcontractors and providers; report any fraud, waste, and abuse; report any overpayments and recoveries; recover any overpayments to any subcontractor or provider; and refer any suspected or potential fraud to the Authority and the Medicaid Fraud Control Division or other law enforcement agency.  The Authority may sanction a managed care organization or assess liquidated damages when the Authority identifies fraud, waste, or abuse by a managed care organization provider or the managed care organization fails to report provider overpayments.
 
The Office of the Attorney General maintains the Medicaid Fraud Control Division which is responsible for civil and criminal investigations and prosecutions of health care provider fraud in Washington's Medicaid program.
 
In July 2021 the State Auditor's Office issued a performance audit of the Authority's Medicaid program integrity efforts.  The findings made several recommendations, including:

• improving executive oversight of the agencies' program integrity efforts;
• providing federally required oversight of Medicaid program integrity efforts at sister agencies;
• developing a statewide fraud and abuse prevention plan;
• developing procedures to provide consistent oversight of program integrity efforts at sister agencies;
• expanding program integrity efforts for managed care organizations; and
• improving audit selection practices to prioritize resources for high-risk cases and meet federal requirements.

Medicaid Program Integrity Activities.
The Health Care Authority (Authority) is declared to be the agency responsible for providing oversight of all federal Medicaid program integrity activities.  The Authority must establish and maintain effective internal control over any state agency that receives Medicaid funding in compliance with federal regulations.
 
The Authority must provide administrative oversight for all medical assistance program funds to ensure that funds are spent according to federal and state laws, services are delivered according to federal requirements, corrective actions are established if expenditures do not align with federal requirements, and sound fiscal stewardship is exercised by all agencies over Medicaid funding.
 
The Authority must oversee the Medicaid program resources of state agencies that expend Medicaid resources by:

• regularly reviewing delegated work;
• jointly reviewing required reports on terminated or sanctioned providers, compliance data, and application data;
• requiring assurances that operational functions have been implemented;
• reviewing audits performed on other agencies using Medicaid funding; and
• assisting with risk assessments, setting goals, and developing policies and procedures.

 
When implementing program integrity activities, the Authority must follow best practices for identifying improper Medicaid spending, including:

• conducting risk assessments or evaluating leads with established risk factors;
• relying on data analytics to generate leads;
• conducting a preliminary review of incoming leads;
• determining the credibility of all allegations of potential fraud prior to referral to the state's Medicaid Fraud Control Unit;
• analyzing all leads under review by managed care organizations;
• working with experts that help state integrity programs improve data analytics and identify potential fraud across Medicare and Medicaid, such as unified program integrity contractors; and
• maintaining a current fraud and abuse detection system.

 
The Authority must develop a strategic plan for Medicaid program integrity that includes strategic goals, agreed-upon objectives, performance measures, and a system to monitor progress and hold responsible parties accountable.  The Authority must create a management information and reporting strategy with performance measures and management reports.  In addition, the Authority must develop and maintain a single, statewide Medicaid fraud and abuse prevention plan that is consistent with national initiatives or federal best practices, as recognized by the federal Centers for Medicare and Medicaid Services.

Contracts between the Authority and managed care organizations must specify each party's responsibilities for maintaining program integrity and the consequences for noncompliance, with adequate penalties to assure compliance.  The contracts must follow leading program integrity requirements recommended by the federal Centers for Medicare and Medicaid Services, including:

• monthly and quarterly meetings between the Authority and the managed care organizations to discuss program integrity issues and findings and to identify trends in fraud and improper payments;
• financial penalties for failure to fulfill program integrity requirements;
• directly auditing providers and recovering overpayments from the providers or assessing liquidated damages against the managed care organizations;
• ensuring that recoveries and liquidated damages from overpayments are accounted for and applied to managed care encounters for future rate setting; and
• ensuring that contracts with managed care organizations are updated to reflect program integrity requirements.

(In support) One in seven Medicaid claims are improper amounts and there are about two million people enrolled in Medicaid in Washington.  In 2021 the State Auditor's Office released a performance audit of the Medicaid program with several recommendations for the Health Care Authority to improve its program.  These recommendations will ensure that state tax dollars are spent on allowable Medicaid claims in the appropriate amount.  This bill will require establishing and maintaining effective internal control over any state agency that receives Medicaid funding.  The goal of this legislation is to assure payments are in the right amount to the right provider for the right reason.  This bill has good accountability and transparency measures.
 
(Opposed) None.

(In support) None.

(Opposed) None.