Districts must adopt new procedures to cope with tighter claims scrutiny

Districts must adopt new procedures to cope with tighter claims scrutiny

Sponsor: Spectrum K12 School Solutions

LIN LESLIE IS VICE PRESIDENT OF MARKETING, BUSINESS RESEARCH AND DEVELOPMENT for CARE Resources Inc., a staffing and special education solutions firm located in Maryland and Arizona. This article, the second of a two-part series about Medicaid issues facing school districts, focuses on ways that districts can overcome some of the regulatory challenges described in the first article.

What can be done to reduce regulatory vulnerability?

Until recently, the risks for school districts of noncompliance were considered minimal. Now, though, penalties for noncompliance can be significant. Prudence dictates that districts adopt policies and procedures that will protect them in the event of an audit. Examples include:

--Flagging claims that are insufficiently documented, fail to meet medical necessity guidelines, or where services are rendered by unlicensed providers

--Checking for the presence of clinical notes and other enabling documentation prior to claim submission

--Distinguishing allowable services from unallowable encounters that are worthy of tracking

--Automating the process of identifying suspect claims

--Conducting random internal claims audits.

Are school districts being scrutinized by federal and state agencies over Medicaid claims?

There is definitely an increased effort by federal and state agencies to detect, analyze and investigate possible fraud and abuse, so school districts need to ensure they have procedures in place to find and correct areas of potential risk. School district personnel must dig deeper into the data. By doing so, they may uncover billing patterns indicative of potential problems that are not evident from a casual review.

What can districts do to build “audit defensibility?”

School district personnel need to adopt appropriate operating procedures in order to demonstrate their approach to regulatory compliance. In many cases, the existence of a district compliance program may influence the way Medicaid auditors deal with findings. For instance, they may be more inclined to interpret a claims violation as an innocent mistake instead of a fraudulent act if the district can demonstrate that it has adopted a rigorous compliance program.

What does this mean for district personnel?

In this period of expanded audit review, district personnel should work with billing agents and vendors to mine their organization’s data and identify any vulnerability. It’s important that they focus on actually preventing fraud rather than simply mitigating it. For example, district personnel should also maintain a close relationship with therapists and other service providers, including sub-contractors, and remind them of the need for maintaining careful clinical notes and other documentation required for audit and quality assurance.

What are some of the promising practices that are emerging?

Many states and districts are using new software solutions that promise to stem inappropriate Medicaid claims by flagging claims that fail established criteria. Some districts have adopted technology solutions that automate the tracking of all Medicaid- eligible encounters. The best of these solutions include features that provide service assurance by flagging discrepancies between services prescribed and services provided.

What’s the bottom line for district leaders?

While reforms of the Medicaid program may be necessary for a number of reasons, a reduction in funding to school districts will have serious and adverse consequences for at-risk children. School districts should participate in crafting policies at the national and state levels that promote partnerships between health and education. In addition, district leaders should take a close look at their systems for managing Medicaid claims and conduct internal reviews of the methods for promulgating claims. Finally, districts should invest in systems and capacity that will reduce the risk of audit findings and provide complete reconciliation from service prescription through service delivery, including Medicaid eligible encounter submissions and payments.


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