Medicaid and Public Assistance Fraud Strike Force
Minutes of May 16, 2011
Senate Office Building, Room 401
Tallahassee, Florida
Welcome and Opening Comments
Call to Order
The second meeting of the Medicaid and Public Assistance Fraud Strike Force was called to
order by Chairman Atwater, just after 1:00 p.m. on May 16, 2011, in room 401 of the Senate
Office Building, Tallahassee, Florida. Roll was called by Executive Director Robin Westcott.
The following members were in attendance: Chief Financial Officer (CFO) and Chairman Jeff
Atwater, Attorney General and Vice-Chair Pam Bondi, Department of Law Enforcement
Assistant Commissioner Ken Tucker, Department of Health Doctor Frank Farmer, Agency for
Health Care Administration Secretary Dudek, Department of Children and Families Services
Secretary Wilkins, Palm Beach County Sheriff Bradshaw (via telephone), Hillsborough County
Sheriff Gee, Miami-Dade Police Department Chief Santana, City of Hollywood Police
Department Chief Wagner. A quorum was established. Miami-Dade State Attorney FernandezRundle joined shortly thereafter via telephone.
Approval of Minutes
There was a motion and second to approve the minutes. The minutes were adopted.
Announcements
CFO and Chairman Atwater recognized two new official appointments from the Governor’s
Office. Dr. Frank Farmer has been appointed to serve as our State’s Surgeon General and
Secretary of the Department of Health. CFO Atwater also noted that, at the direction of the
Governor the term Interim has been removed, and Secretary Liz Dudek is now the Secretary of
the Agency for Health Care Administrations. CFO Atwater then reminded the group that the
meeting is being filmed live and is available for viewing via webcast and instructed them on the
use of their microphones.
Legislative Updates
Agency for Health Care Administration
The CFO introduced Roberta Bradford, Deputy Secretary for Medicaid, with the Agency for
Health Care Administration, to give an update on 2011 legislation. Ms. Bradford referred to
materials included in the meeting packet that provide an overview of the Medicaid program.
Medicaid is a state/federal partnership in which states can operate a Medicaid program; all states
do at this time. The Medicaid program provides health care services and medical coverage but
also long term care. Our current prepaid health plans and nursing home diversions are forms of
managed long term care.
Currently, Florida is the fifth largest state in terms of Medicaid expenditures with an estimated
spending of $20 billion. We serve more than 3 million Floridians in any given month and are the
fourth largest program by population. We have 110,000 Medicaid providers today enrolled on a
fee for service basis as well as 25 Medicaid Managed Care Plans, including 19 Health
Maintenance Organizations (HMOs) and 6 Professional Service Networks (PSNs). From the
contracting and payment side, we process approximately 135 million claims every year.
Federal law provides for waiver programs to be offered by the state which allows us to provide
programs that meet state specific needs. Currently, we have 15 home and community based
service waivers, three 1115 waivers (like the data mining waiver) and two 1915(b) waivers
which are commonly referred to as managed care or freedom of choice.
Florida’s current Medicaid enrollment is divided among four broad service delivery systems.
There are individuals currently under fee-for-service who are completely exempt from managed
care. A lot of these have limited benefit coverage, e.g., family planning women who lose
eligibility after they have had a baby. They are exempt because they don’t receive a complete
benefit package. Other individuals who are currently exempt include those in nursing homes or
institutions. Medipass is also a fee for services program in which members are assigned primary
care case managers. Right now there are 2500 throughout the state. These providers are paid $2
per member per month case management fee. Services are reimbursed on a fee for service basis.
Under contracted plans, we have Provider Service Networks (PSNs), defined in s. 409.912(4)(d)
as integrated health care delivery systems owned and operated by a health care provider – very
similar to an HMO. Currently, PSN’s have the option to be reimbursed on a fee for service or
capitated basis. Fee for service basis is really a risk arrangement because they share liability. The
state pays them an administrative fee, they create a network and manage the services, but then
they go into a cost reconcile to make sure that they are coordinating services and providing them
in as cost effective manner as an HMO would. In some instances, they must return funds to the
state. There are currently 6 PSNs participating in Florida Medicaid. HMO’s are licensed under
Chapter 641, Florida Statutes. The Agency contracts with them on a prepaid fixed per member
monthly rate (capitation rate) and the HMO assumes all the risk for providing services. There are
currently 19 HMOs contracted throughout the state.
Contracted plans that are available today reflect geographic diversity. In some areas there are
more managed care providers than in other areas. Current contracts require the providers to have
compliance officers and take responsibility for providing fraud and abuse training (primarily at
the plan network level). In addition, they must facilitate monitoring by the Agency. They must
provide detailed financial reports so the Agency can look at performance measures to ensure
services are available and accessible. The Agency reviews complaints and grievances as a way to
detect fraud or abuse. Claims aging is reviewed to make sure payments are timely. Changes in
ownership and management are reviewed to ensure the plans remain Medicaid eligible. The
Agency also uses encounter data to monitor the plans, as well as subcontract and provider
agreements. Encounter data, which must be HIPAA compliant, essentially includes the claim
information required under a fee for service system. It is used to assess service utilization trends,
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quality of care, access to care, and rate and risk modeling (e.g., rates can get adjusted as
appropriate to the population served – a sicker population can receive higher rates). The Agency
uses this information in the rate setting process.
During the 2011 Legislative session, the House and Senate passed HB7107 and HB 7109 to
reform the Florida Medicaid program requiring implementation of a statewide Long Term
Managed Care program and a statewide Managed Medical Assistance program. Since Medicaid
fraud and abuse is primarily a fee for service system problem, the move to managed care should
reduce fraud and abuse in the system. The managed care plans will have an incentive to be
vigilant in combating fraud and abuse. Managed care can also be a tool for using resources more
effectively while improving outcomes because the state can redirect efforts to make sure the
plans are accountable in providing the state value. The benefits of managed care are
• Increased accountability;
• Improved access to health care services;
• Flexibility in that the plans can offer services the state cannot;
• Predictability of cost; and
• Reduction in growth rate of expenditures.
HB 7107 establishes 11 regions in the state and the Agency is required to separately procure for
Long Term Managed Care and managed medical assistance plans in each of the regions. It also
requires timely implementation of the Long Term Managed Care and Managed Medical
Assistance programs with submission of a federal waiver request by August 1, 2011 and
statewide implementation of the programs by October 1, 2014. The law prescribes the minimum
and maximum numbers of plans to be made available in each region and specifies the number of
PSNs that can participate. The prescribed number of plans will allow for somewhere between 30
and 53 plans each for Long Term and Medical Assistance managed care. The Agency is to begin
implementation of Long Term Managed Care by January 1, 2013 with full implementation in all
regions due by October 1, 2014. For Managed Medical Assistance, the Agency shall begin
implementation by July 1, 2012 with full implementation in all regions by October 1, 2013.
Eligible plans include HMOs, PSNs, health insurers under Chapter 624, exclusive provider
organizations (EPOs), as well as Long Term Managed Care programs (such as Medicare
Advantage) to fully coordinate services for dual eligibles. At this time, the Agency has authority
to contract with any of these entities. Eligible plans for Managed Medical Assistance are similar
with the exception that the Agency is authorized to contract with accountable care organizations
(ACOs), as well as the Children’s Medical Services Network. The ACO organizations are
authorized under federal law however the draft federal rule has not yet been finalized.
Eligible recipients for the Long Term Managed Care program include:
• Individuals 65 years of age or older, or 18 years of age or older and eligible for Medicaid
by reason of disability; and
• Determined by an assessment to require nursing facility care as defined in s. 409.985(3).
Once the Long Term Managed Care program is up and running, current beneficiaries in nursing
homes or enrolled in one of the Medicaid long term care waiver programs will be transitioned to
the new Long Term Managed Care enrollment.
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The following Medicaid-eligible persons are exempt from mandatory managed care enrollment
for either Long Term Care or Medical Assistance but may voluntarily participate:
• Medicaid recipients who have other creditable health care coverage, excluding Medicare;
• Medicaid recipients residing in residential commitment facilities operated by the
Department of Juvenile Justice or mental health treatment facilities;
• Persons eligible for refugee assistance;
• Medicaid recipients who are residents of a developmental disability center; or
• Medicaid recipients enrolled in or waiting for home and community based waiver
services.
The following Medicaid-eligible persons are excluded from participation in mandatory managed
care:
• Women who are eligible only for family planning services;
• Women who are eligible only for breast and cervical cancer services;
• Persons who are eligible for emergency Medicaid for aliens; and
• Children receiving services in a prescribed pediatric extended care center.
Additional requirements of the legislation include:
• Agency negotiated capitation rates that guarantee a savings of at least 5% the first year;
• Establishment of a program to return some savings to the plan and some to the state;
• The Agency is responsible for verifying savings through audits, paid for by the plans;
• The plans are responsible for making available all information required for the audits;
• Enhanced Fraud and Abuse prevention requirements for the plans.
• Specified uses of encounter data.
• Penalties for plans that reduce enrollment levels or leave a region and for failure to
comply with encounter data submission.
Attorney General Bondi asked if the legislation says that fraud against an HMO is considered
fraud against the state; Ms. Bradford said she did not recall that being specifically addressed.
Department of Health
CFO Atwater introduced Kim Berfield, Deputy Secretary for the Department of Health, to give
an update on medical license requirements.
Ms. Berfield reported that historically the Department has only had general statutory authority to
discipline practitioners. The 2009 SB1986 created a new basis for the Department to pursue
disciplinary action against a practitioner. Grounds for discipline have been expanded to include
felonies and misdemeanors for various federal violations. One specific violation that has been
added is related to overpayment and being terminated from Medicaid or Medicare programs,
unless eligibility has been restored. A disciplinary ground was also added related to convictions
of or entering a guilty or NOLO plea to any misdemeanor or felony related to health care fraud.
The legislation also imposed new requirements on Medical Quality Assurance (MQA). They
were directed to cooperate with AHCA in the collection of overpayments for Medicaid and to
publish practitioner profiles on the MQA website. The legislation also requires DOH to deny
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licensure or renewal and refuse to admit candidates to any exams if they have committed
specified Florida and federal felony offenses.(and/or have been terminated for cause as a
Medicaid/Medicare provider in any state) within the last 15 years prior to the date of application.
There are provisions for applicants who have been in good standing with the Florida Medicaid
program for the most recent 5 years and for applicants in good standing with the state or federal
program for the most recent 5 years where termination occurred at least 20 years prior to that.
The Department’s authority to issue immediate Emergency Suspension Orders (ESO) was also
broadened to include state and federal misdemeanor and felony offenses related to the Medicaid
program. Regulation of pharmacy permits was strengthened by requiring background screens and
denials to applicants for specified violations. This year there have been three denials.
Implementation challenges have arisen but most have been addressed. One remaining challenge
is that the Department is not permitted to conduct criminal background screenings on all
professionals outlined in Chapter 456. Chapter 456 outlines which professionals the Department
is allowed to conduct these checks on. CFO Atwater asked if the Strike Force could assist in
overcoming some of the challenges encountered. Ms. Berfield responded that they do want to
approach the legislature regarding the criminal background investigations. Another area relates
to information technology which is directly tied to working with and analyzing data.
Strike Force Initiatives
CFO Atwater asked Ms. Robin Westcott, Executive Director of the Strike Force to give an
update on Strike Force Initiatives. Ms. Westcott began by pointing out that they had set an
aggressive timeline for undertaking initiatives on behalf of the Strike Force. She noted that, in
the meeting materials, she had included several memoranda requesting the agencies to identify
persons from the agencies who would be the best resource to assist with the various Strike Force
initiatives. She asked that the Strike Force members complete the forms requesting those
designations and return them to the Strike Force. She stressed that she is aware that all of these
people have other jobs and that we don’t want duplicate processes or work.
Initial Mapping
One of the initiatives is an initial cross agency mapping. This will entail taking available
mapping information from the agencies and consolidating it into one cross-agency map that
reflects the delivery process from intake to referrals for services, on to referrals for investigation
and then for prosecution. We want to make sure we build a comprehensive overview of the
delivery system that will allow us to identify vulnerable areas to look more closely at.
Economist
A second initiative is one that we have already procured consulting services for is for an
economist and the consultant is here. She introduced Drs. Charles Mullins and Dubrevka Toscic.
Their expertise was solicited to help identify the actual measurement of fraud, waste and abuse is
in the Medicaid delivery systems. We are currently completing a contract for their services. CFO
Atwater added that many have heard the projections of what the potential losses are in the system
but it would be valuable to know what our actual losses are so we can go back to the legislature
and report on the progress that has been made.
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Drs. Charles Mullins and Dubrevka Toscic introduced themselves as members of the firm ERS,
which is headquartered in Tallahassee and has been incorporated for 30 years. ERS also has
professionals in Los Angeles, San Francisco and Washington, D.C., some of whom have a
background in health care economics, who they will draw from. The firm also has experts in
economic and statistical modeling where most of their work has been done in labor and
employment contexts. Another thing that ERS is expert at is handling large, complex databases.
Concerns were raised about the utility of completing a quantification in the fee for services area
at this time, given the legislated move to managed care. CFO Atwater responded the timeline
appears to be two to three years for the transition and we can use this opportunity to learn in the
interim. There were also concerns raised that the timeline is extremely short and that the data
collection will be very time consuming. There was also a question raised about ERS’ experience
in constructing damage models for Medicaid fraud because the numbers they come up with will
have serious implications. Dr. Mullins responded that ERS is very experienced at data analysis
so the extent to which there is data to look at, we will be able to develop a model. He
acknowledged that it is an extremely complicated project and ERS has not done this type of work
with Medicaid data. However, they are a wholly owned subsidiary of another company that does
Medicaid reimbursement claims that has prepayment investigation processes in place.
CFO Atwater indicated that he would take responsibility for the pressing timeline, saying he did
not intend to substitute quality for speed. He added that he thought the ERS team would
appreciate if we gave them more time. Dr. Mullins responded that they would be more than
happy to have more time. He noted that if they feel the need after looking at the data, they will
certainly let the staff know.
Dr. Mullins was then asked if they plan to come back with some global number or are they
expecting to identify areas that are likely to have more fraud and abuse? Dr. Mullins indicated
that he thinks the data will provide direction on this. For example, if it appears that certain
geographies seem to have a higher incidence, they will identify that. If it’s indicated that certain
services are more likely to have fraudulent activity, they will identify that.
Barriers to Data Sharing
Ms. Westcott announced another activity being undertaken internally: looking at laws, rules or
practices in place that allow or don’t allow us to share data.
These three projects fit together very nicely and Strike Force staff will be working hard to make
sure there is continuity between the projects and they are being undertaken in simultaneous,
organized fashion, and that we provide and are asking for information from the agencies and
distributing that to our vendors in a timely manner. She acknowledged that this is a very
aggressive timeline; however, we do have a report due to the Legislature in October.
Regarding data sharing, it was pointed out that the technology is really the easy part. The
predictive analysis is the real issue; you can have reams and reams of data but picking that
software or technology that can reliably tell you what you can expect will be really tough.
MEMBER INITIATIVES
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Project Management Initiative – Secretary Wilkins, Department of Children and Families
Secretary Wilkins reported that, in recognition of how important this fraud issue is, he has
created a new organization, reporting to him as the Secretary, to really focus on fraud and abuse
in the eligibility process. The current functions of data integrity and benefit recovery in his
Department will be consolidated and report directly to him to ensure they are well integrated into
the larger efforts.
They have had some successes in the last couple of months combating fraud. There are some
significant investigations they are working on which cannot be discussed because they are
ongoing. But they are demonstrating that when all the agencies work together we can generate
some good results. They did identify a website – GetFoodStampsNow.org - which they had been
working with FTC on to file contempt charges against the marketer. It is a fraudulent website
scamming Floridians into thinking they can go to the website and get food stamps faster.
He also reported that this legislative session, a bill passed that will require drug testing for all
recipients of TANF, temporary cash assistance and food stamps. They are currently working on
all the processes necessary in order for that to be implemented by July 1.
Data Mining Grant – David Lewis, Director, MFCU/Office of Attorney General
Mr. Lewis began by pointing out that one problem the MFCU had with respect to using the
available data is tied to funding. MFCU operates on a budget which is $3 in federal funds for
every $1 in state funds. Because of the cost sharing, one federal restriction for MFCU was that
they not conduct routine reviews of Medicaid claims data to look for patterns in billing that
would identify fraud. The reason was that AHCA receives federal funds to do this and the federal
government didn’t want to pay two agencies to do the same thing, since it has historically been
costly. However processes have become more automated and there have been huge advances in
computer hardware and software and the ability to manage data. In addition, the MFCUs had
developed the capability to do this; but were restricted against doing it unless they had good
reason to believe fraud was occurring.
So, the Florida MFCU, in collaboration with AHCA, asked CMS for a waiver from the
restriction to allow them to do this and CMS granted the waiver. They requested they be allowed
to allocate three analysts to do this. There is no intent to replace AHCA’s activities in doing this;
this is only a way for MFCU to generate leads. The waiver is for a three year pilot project. For
the first year, each analyst will spend up to 15% of their time on this and the last two years for up
to 25%. There were some initial expenditures for resources to support this and last October 1,
they began the data mining. All leads are still under investigation, so they don’t have results yet.
However, the attention is on Florida as the only state that has been allowed to do this. HHS is
drafting some language to amend the Federal Code to allow more flexibility for MFCUs to do
data mining. However, it has not been adopted yet and is still in the commentary phase. CFO
Atwater thanked and congratulated Mr. Lewis for establishing Florida as the model.
Legislative Budget Request for Case Management - Mike Blackburn, Bureau Chief, Medicaid
Program Integrity, AHCA
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CFO Atwater reported that there is an interagency work group meeting to address interagency
efforts to improve fraud prevention, detection and prosecution efforts that has been led by Mike
Blackburn at AHCA and asked that he offer a report on what the group has been doing.
He began by thanking the members of the Strike Force for having supported and helped to push
through the LBR for the Case Management initiative for AHCA.
Mr. Blackburn reported that a recent bi-annual audit from the Office of Program Policy Analysis
and Government Accountability (OPPAGA) recommended that AHCA expand its detection tools
to include neural networking and other advanced techniques for detecting emerging fraud and
abuse patterns. AHCA has tools in place, but most of what is available is ad hoc. This LBR will
replace an aging case tracking system and incorporate advanced detection systems. These are
essentially detection devices that are able to learn from its existing audit processes. As it goes
through the normal audit processes and determine inappropriate claims, they are flagged so the
system begins to learn what an inappropriate claim looks like. Over time, it is able to work in the
background, automatically reviewing all the data that is available. They have a small window of
time between when a claim is processed and when a payment has to go out. This new system will
enable us to take a claim where a flag has triggered and examine and adjudicate it before the
payment goes out. There are existing ways to stop a payment when it is clear that program rules
have been violated but this would provide a more predictive analysis of each claim before a
payment is made, unless a provider is billing against his own trends. The legislature has
approved this. If the Governor signs off on it they will be able to proceed. Once they have gone
through procurement, if they are able to find an OTS software it should be a 6 to 9 month
implementation timeframe. CFO Atwater thanked Mr. Blackburn and congratulated Secretary
Dudek on this achievement in this past legislative session.
Inter-Agency Working Group - Mike Blackburn, Bureau Chief, Medicaid Program Integrity,
AHCA
Mr. Blackburn reported they have held bi-monthly interagency meetings of Bureau Chief or
above representatives from the agencies that they feel play a role in Medicaid fraud and abuse for
several years. They focus on planning and it really helped the agencies work through the
implementation of the communication requirements of SB 1986. They are preparing to launch a
subgroup to focus solely on technology since the current representatives are not necessarily
knowledgeable on IT. This subgroup will help with designing the automation of the processes
that have previously been done manually. This group’s objectives are to implement the Strategic
Plan for Data Connectivity and to periodically review the plan for updates. This group will also
help establish a referral tracking system. Mr. Blackburn added that they will want to know how
they can support the Strike Force Technology Committee.
COMMITTEES
CFO Atwater noted that the Executive Director has asked the agencies to offer expertise from
their staff to help support initiatives of the Strike Force. Ms. Westcott noted that, in the meeting
materials, there were some memoranda requesting designated representatives for each of the
committees. She has gotten some back and is grateful to those who have responded. For the
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others, she asked that they go ahead and get those back. We will be planning to facilitate these
meetings, handling the scheduling and administrative support of their work.
Technology Committee
For the Technology Committee, we have asked the agencies to identify a CIO level staff member
to serve on this committee. This committee will be integral at trying to take the technology that is
available, the mapping products, and the identification of weaknesses as we move forward
toward managed care and advise us on what technology best addresses our needs. We will also
look to them for guidance when they anticipate issues that are arising that could impact
technology support needed to support the efforts of the Strike Force and participating agencies.
Grants Committee
The second committee will be a grants committee; which will be asked to help identify grant
funds to support initiatives of the Strike Force and participating agencies. When the Strike Force
is in a position to launch a grants initiative, which is a statutory charge to the Strike Force, this
group would help us identify and make grant awards to deserving beneficiaries to help
implement strategies supported by the Strike Force.
Legislative and Policy Committee
The third committee will be a Legislative and Policy Committee. As we identify things that we
can take from our Strike Force members as recommendations to the legislature based upon
policy issues, this group will help formalize them into legislative and budget proposals. She
added we are on a fast timeline since we have a report due in October and need to be ready for
the legislative session.
Executive Committee
In the future, it may be helpful to have this committee established in order that a smaller group
can help review issues and concerns and bring them to the larger group.
CLOSING REMARKS
CFO Atwater encouraged the Strike Force members to call on Ms. Westcott for briefings from
time to time. He closed by mentioning that the next meeting has been tentatively scheduled to be
held in the Miami-Dade area, in light of the concentration of activity and providers in the MiamiDade area. State Attorney Fernandez-Rundle offered the use of her facilities and CFO Atwater
asked Ms. Westcott to check out those facilities and ensure that they will meet our needs.
Attorney General Bondi thanked the CFO for his leadership. The CFO adjourned the meeting at
approximately 3:59 p.m.
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