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Audit finds Medicaid not in compliance

West Virginia’s Bureau of Medical Services is not following a 2011 federal directive to suspend Medicaid payments to health-care providers accused of fraud, putting it at risk of losing between $17.9 million to $211 million in federal matching funds, a legislative audit released Tuesday warns.

The audit notes that a 2011 amendment to the Affordable Care Act requires states to suspend Medicaid payments to providers once it is determined that an allegation of fraud is credible and is referred to the Medicaid Fraud Control Unit for investigation.

Since the rule went into effect in March 2011, the Bureau of Medical Services has referred 65 cases to the Fraud Control Unit, but 58 of those cases show no record that payments to the providers were suspended, the audit found.

During that time, providers whose cases have been referred to the Fraud Control Unit have been paid at least $17.9 million by Medicaid, and the audit found that amount could be as high as $211 million.

If the bureau were to be audited by the federal Centers for Medicare and Medicaid Services (CMS) for failure to comply with the suspension of payments requirement, it could lose those amounts of money in federal matching funds, the audit concluded.

However, Alva Page, counsel for the bureau, told legislators the Department of Health and Human Resources has requested, but not received, clarification from CMS on the payment suspension rule, particularly on what constitutes a credible allegation of fraud.

He said the DHHR had received a draft response from CMS, but by law, is not permitted to divulge its contents.

Page suggested CMS must have intended for the rule to be interpreted liberally, to avoid “a chilling effect on referrals to the Fraud Unit.”

“That has been the issue since the audit, and since the regulation came out,” he said.

Additionally, DHHR Secretary Karen Bowling submitted a letter to legislative auditors noting that 37 cases cited in the audit were pending an initial review or further investigation.

Of those, four cases were closed after successful adjudication, resulting in more than $4.67 million in settlements or restitution, while eight cases were closed without merit, after the allegations of fraud were not substantiated, she stated.

Also during interim meetings Tuesday, Community and Technical College Chancellor Joe Skidmore briefed legislators on expansion of oil and gas training programs at West Virginia Northern and Pierpont community colleges in light of burgeoning Marcellus Shale drilling.

Skidmore said plans include adding an outdoor drilling rig simulator, and possibly expanding training classes to WVU Parkersburg and to offer retraining programs for laid off coal miners at southern West Virginia community colleges.

Current offerings train students to serve as technicians and as assistants to engineers and geologists. Charlie Burd, executive director of the Independent Oil and Gas Association of West Virginia, told the Joint Committee on Economic Development that starting salaries for those positions start in the mid-$70,000 range.

“These are relatively high-paying jobs,” he said.

Skidmore said one obstacle in expanding the courses has been the difficulty hiring instructors, since the pay is low compared to industry salaries. He said the CTCs have relied on hiring recent retirees, or having instructors on loan from the oil and gas companies.

Reach Phil Kabler at or 304-348-1220.

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