States trying to recoup Medicaid money

Idaho is the latest to join the trend, which doctors argue hurts patient access.

By Joel B. Finkelstein, AMNews staff. May 23/30, 2005.

Washington -- For Idaho physicians, the state's decision to hire a private firm to audit the Medicaid program sends a troubling mixed message.

The state says it wants physicians to serve these patients, but ultimately, auditing doctors will only discourage them from dealing with the program, said Bob Seehusen, CEO of the Idaho Medical Assn.

"It's not good for the patient population. It's not good for the profession," Seehusen said.

Idaho is part of a growing trend. Faced with burgeoning Medicaid budgets, more states are turning to outside auditors to squeeze out savings by scouring claims for overpayments. Oregon and Michigan also have recently hired contractors for this purpose. The work of these private firms supplements the internal audits that most states have been performing for as long as they have had Medicaid programs.

In Idaho, as Medicaid spending grew, so did the state's concern about overpayments, said Ross Mason, a spokesman for the state's Dept. of Health and Welfare.

That's why the department recently signed a two-year contract worth $450,000 with Health Management Systems, a New York-based company that has performed audits for 30 states and the District of Columbia.

HMS has found more than $2.7 billion in overpayments for its clients since it was founded in 1985, although more than half of that money was recovered in just the past five years, according to press statements. HMS offers states the ability to look at a much broader scope of program data than their Medicaid departments have the capacity to review, state officials explained.