DCS Comprehensive Health Plan

Audit and Recovery

Statement/Purpose

This policy outlines the framework used by DCS Comprehensive Health Plan (DCS CHP) for conducting audits and recoveries by enforcing internal controls, auditing claims payments, identifying and reporting fraud, waste and abuse, avoiding costs when another payer is liable, recovering overpayments, and pursuing reimbursable amounts through collection efforts and contract clauses.

Definitions

Coordination of Benefits (COB): The activities involved in determining Medicaid benefits when a member has coverage through an individual, entity, insurance, or program that is liable to pay for health care services

Managed Care Organization (MCO): A health plan which is focused on quality care while maximizing fiscal efficiencies to reduce healthcare costs.

Reinsurance: A stop-loss program provided by AHCCCS to the Contractor for the partial reimbursement of covered medical services for the Contract year. Reinsurance case types include but are not limited to regular, catastrophic, and transplant. These case types may have different qualifying criteria and reimbursement.

Third Party Liability (TPL): The legal obligation of third parties (e.g., certain individuals, entities, insurers, or programs) to pay part or all of the expenditures for medical assistance furnished under a Medicaid state plan.

Policy

DCS CHP establishes and maintains internal controls that align with federal and state regulations, including the State of Arizona Accounting Manual (SAAM) in order to make only appropriate payments. Quarterly tests of the controls are performed to ensure proper functionality and to evaluate and document the effectiveness observed.

Procedure

Audits

DCS CHP audits its contracted MCO’s claims processing functions including but not limited to:

• High Dollar Claims Audit,

• Quarterly Service Verification Audit, and

• Fraud, Waste and Abuse Audits (ad-hoc and scheduled)

Financial information, including quarterly financial statements, is submitted by the contracted MCO to DCS CHP Finance function area. The DCS CHP Finance function area performs reconciliations of medical costs vs. capitation paid and also reviews non-Medicaid claims information for utilization and cost vs. capitation paid.

Recoveries

Third Party Liability (TPL) is collected from insurance settlements for the reimbursement of medical, dental and pharmacy claims that DCS CHP paid as a result of a member’s accident or injury. DCS CHP and its contracted MCO works in conjunction with Health Management Systems (HMS) and various law firms to stake a claim for full or partial reimbursement depending on the amount of the settlement and the number of other parties involved. DCS CHP ensures that joint recoveries are appropriately shared among agencies by keeping HMS, AHCCCS’ subcontractor, up-to- date on dollar amounts and the progression of the settlement.

When TPL data is collected related to claims paid by its contracted MCO, DCS CHP shares that information with its contracted MCO. When settlement is received, the funds are forwarded to the contracted MCO.

Reinsurance is a stop-loss program built into DCS CHP’s Intergovernmental Agreement with AHCCCS. Inpatient costs exceeding a $150,000 deductible per member/per case year are reimbursed by AHCCCS to CHP at 75%. Catastrophic cases by diagnosis and transplant cases are reinsured at 85% after a $0 deductible.

As part of the oversight of its contracted MCO, CHP receives a monthly report of potential reinsurance cases. The reports are reviewed for:

• Members that may qualify for Reinsurance that are not on the list from its contracted MCO;

• Confirmation that DCS CHP is aware of the members and of their reinsurance medications/services and confirmation that the appropriate requests to AHCCCS for reinsurance have been submitted;

• Determinations of whether these members require special care coordination and, if necessary, can the members be reviewed in some other way;

• Verification that members are tracked internally (DCS CHP can pull a list of members at any time).

Cost Avoidance, whether through Claims Edits that help prevent overpayments or through Coordination of Benefits (COB), is the quickest, most complete and least expensive way to maximize Program Integrity. By not paying a claim when another payer is the primary carrier and by catching overpayments before they occur, DCS CHP avoids sending erroneous payments and eliminates administrative efforts needed to track reimbursements. Claims Edits and COB amounts are measured and reported quarterly to AHCCCS.

DCS CHP requires quarterly cost avoidance reports from its contracted MCO. DCS CHP reviews the reports and verifies the notes for percent of change quarter over quarter as part of DCS CHP’s oversight activities. A Cost Avoidance report is submitted to AHCCCS as required.