Medicare Compliance & Reimbursement

Senator wants states to provide information on contingency-fee payouts.

Sen. Charles Grassley (R-IA) continues to ask tough questions about Medicaid spending overages, fraud and waste: This time, the senator is examining the state practice of hiring contingency-fee consultants.
 
Armed with the findings of a recent report from the Government Accountability Office, Grassley, who chairs the Senate Finance Committee, sent a letter to governors in all states and the District of Columbia asking for information on their policies governing the use of contingency-fee consultants.
 
"Medicaid spending is increasing faster than current budget limitations can afford. [We need to] rein in growth and still expand eligibility to those most in need," Grassley said in a statement. Congress and Medicaid can help "rein in growth" by establishing clear-cut ground rules for states when it comes to the use of contingency-fee consultants, said Grassley.
 
The letter, sent July 14, asks governors to detail how their states are using Medicaid consultants - and the final destination of any extra Medicaid money they earn from contingency-fee consults. Grassley wrote the letter after receiving the findings of the June 28 GAO report: "Medicaid Financing: States' Use of Contingency-Fee Consultants to Maximize Federal Reimbursements Highlights Need for Improved Federal Oversight."
 
Responding to the GAO study, Grassley said it was unfortunate that states seemed to be taking advantage of the federal system by copping payment increases through "schemes of questionable legality."
 
"Medicaid dollars should not be lining the pockets of consultants who plot new ways to exploit the system," he added. The report found that, in general, Medicaid was paying too much to states for contingency fee consults.
 
"As of 2004, 34 states - up from 10 states in 2002 - used contingency-fee consultants to implement projects to maximize federal Medicaid reimbursements," the report stated. It did not help that federal investigators often did not look into states' uses of contingency-fee consultants, leading to some questionable billing practices.

Massachusetts, Georgia Lead Contingency-Fee Payouts

According to the GAO, contingency-fee consultant payments were of particular concern in a pair of states. In Georgia, Massachusetts, or both states, GAO identified claims "that were problematic because they appeared to be inconsistent with current policy or were inconsistent with federal law; others undermined Medicaid's fiscal integrity," the report states.