Pennsylvania Needs an Automated System To Detect Medicaid Fraud and Abuse

HRD-79-113: Published: Sep 24, 1979. Publicly Released: Sep 28, 1979.

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A GAO review of Pennsylvania's efforts to control Medicaid fraud and abuse surveyed the planned Medicaid Management Information System (MMIS); the Pennsylvania Department of Public Welfare's administration of the State Medicaid Program; Pennsylvania's Medical Assistance Management Information System; the State's Medicaid claims process and utilization review operation; and the Pennsylvania Department of Justice's Medicaid Fraud Control Unit (MFCU).

It was determined that Medicaid fraud and abuse could go undetected in Pennsylvania, primarily because the State did not have an automated Medicaid claims processing and information retrieval system in full operation. MMIS, designed to detect ineligibility, duplicate billing, inappropriate charges, and third-party liability, could not be fully implemented because of State budget cuts. Utilization review of Pennsylvania's Medicaid program was primarily a manual operation producing only a 5 percent nonrandom sample, allowing an unknown number of program abuses to escape detection. MFCU, certified in August 1978 by the Department of Health, Education and Welfare (HEW) to receive 90 percent Federal funding, exhibited some irregularities in establishing referral and assistance arrangements with local prosecutors required by HEW certification. The lack of a specific Pennsylvania statute penalizing fraudulent Medicaid providers made preparing and prosecuting complex Medicaid fraud cases more difficult. State statutes used by prosecutors carried various penalties, some not as severe as Federal penalties for Medicaid abuse.

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