Michigan OIG: Cost Avoidance and Investigation Types Overview
David Russell
Office of Inspector General
Michigan Department of Health & Human Services
March 10-11, 2020
Panel Discussion:
Measuring Cost Avoidance
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Public assistance and Medicaid is administered via
the Michigan Department of Health & Human Services
(MDHHS)
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Michigan’s programs are state managed, and state
administered
Overview:
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Michigan has 83 Counties
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9.9 Million residents
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1.2 Million public assistance
recipients
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$2.02 Million in payments
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2.91 Medicaid recipients
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Michigan’s Office of Inspector General is housed within MDHHS
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100+/- Investigators responsible for recipient Program Integrity
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Latest OIG-Enforcement Division Statistics:
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Determined $110.4 million of fraud, cost savings and established
program disqualifications
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Completed 7,134 fraud investigation dispositions
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Completed 24,712 Front End Eligibility (FEE)
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investigations
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Identified $85.3 million in cost avoidance in FEE investigations
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Established an additional $6 million in cost savings from intentional
program violation (IPV) disqualifications
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Identified $11.8 million of program fraud
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Pre-Certification Investigations:
Front End Eligibility (FEE):
OIG investigates when applications or re-certifications for
public assistance contain suspicious or error-prone information. Agents investigate,
substantiate or refute discrepancies and suspicious activities; the results may involve an
assistance case not being opened, reduced benefits issued and/or case closure.
These cases are used to calculate
cost avoidance
•
Some may be assigned as fraud investigations based on
identified financial loss
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Fraud Investigations:
OIG investigates
instances of alleged fraud in all programs administered by the
department. Examples include:
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Cash, SNAP, childcare, Medicaid, etc.
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Vendor fraud and state employees alleged to be involved in program fraud or
certain crimes against MDHHS.
All investigations found to contain criminal activity are forwarded to the
appropriate authority for criminal disposition or are sent to the appropriate area
within MDHHS for administrative action.
These cases are used to calculate
overpayments
•
Some may be assigned a FEE component where the fraud continues (e.g.,
OIG analytics identified the case for investigation and the worker was
unaware of the fraud.)
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The primary impact of FEE investigations is the potential for taxpayer cost
avoidance on cases that are denied, reduced or applications retracted by
the household.
Measuring/Calculating Cost Avoidance is a component of OIG’s case
management system. It is used to report out for:
•
Annual Reports
•
Legislative Requests
•
Staffing enhancement requests
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System enhancement requests
OIG investigators collect key data points at each FEE investigation
disposition. Data is used by the case management system to
automatically calculate and report on cost avoidance.
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MIGS tables are updated each fiscal
year with average monthly household
grants for each program/person.
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FAP = SNAP
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These amounts will be used in the
cost avoidance calculation and
may/may not be annualized.
•
Medicaid-utilize average monthly
capitation payment.
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For programs that affect one person for
one lump sum, there is only one entry.
It will not be annualized.
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E.g., SER or MA one-time (costly
procedure).
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The outcome chosen and agreed to by the Case Worker is used to
determine if cost avoidance is counted. E.g.:
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Benefits Denied = Cost Avoidance
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Full Benefits = No Cost Avoidance
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Benefits Reduced = Partial (actual) Cost Avoidance is calculated
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At the completion of the investigation, the investigator identifies the
number of household members affected by an outcome (e.g., Denial of
Application),
by program
.
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The Case Worker will have an opportunity to agree or change the
outcome, and dollar value of the actual cost avoidance.
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Don’t forget the value of the disqualification when measuring
program integrity efforts.
OIG includes this number in annual reports, etc.
The value is based on a monthly program amount for a single
individual multiplied by the time period (months) of the
disqualification:
•
1 year = 12 months
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2 years = 24 months
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10 years = 120 months
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Lifetime = 240 months
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(20 years was internally chosen)
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Key Principles:
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Pick a method to calculate/measure cost avoidance and stick with it.
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Provides a valid metric to compare year over year.
•
Be able to explain how you derived your numbers.
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Improve on methodology as technology allows.
When setting up our current cost avoidance formula, OIG reviewed the
standard lifecycle of a SNAP case, which was 24 months in Michigan. OIG
went with a 12-month multiplier to be conservative.
In Michigan, for FY 2018, PARIS (Interstate, Federal and Veteran) matches
resulted in $40.5 million in annual cost avoidance through OIG efforts.
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David M. Russell, Director
Operations Division
Michigan DHHS-Inspector General
517-284-4010 (desk)
517-896-9597 (cell)
RussellD3@michigan.gov
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Michigan's Office of Inspector General (OIG) within the Department of Health & Human Services conducts investigations to ensure data integrity, targeting areas like cost avoidance, fraud, and program violations in public assistance programs. The OIG's efforts have resulted in significant savings and disqualifications, showcasing their commitment to program integrity and taxpayer protection.
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Presentation Transcript
2020 PARIS Training Conference Reaching Out for Data Integrity Panel Discussion: Measuring Cost Avoidance David Russell Office of Inspector General Michigan Department of Health & Human Services March 10-11, 2020
Michigans Makeup Overview: Michigan has 83 Counties 9.9 Million residents 1.2 Million public assistance recipients $2.02 Million in payments 2.91 Medicaid recipients Public assistance and Medicaid is administered via the Michigan Department of Health & Human Services (MDHHS) Michigan s programs are state managed, and state administered
Michigans OIG Michigan s Office of Inspector General is housed within MDHHS 100+/- Investigators responsible for recipient Program Integrity Latest OIG-Enforcement Division Statistics: Determined $110.4 million of fraud, cost savings and established program disqualifications Completed 7,134 fraud investigation dispositions Completed 24,712 Front End Eligibility (FEE)1 investigations Identified $85.3 million in cost avoidance in FEE investigations Established an additional $6 million in cost savings from intentional program violation (IPV) disqualifications Identified $11.8 million of program fraud
Investigation Types Pre-Certification Investigations: Front End Eligibility (FEE): OIG investigates when applications or re-certifications for public assistance contain suspicious or error-prone information. Agents investigate, substantiate or refute discrepancies and suspicious activities; the results may involve an assistance case not being opened, reduced benefits issued and/or case closure. These cases are used to calculate cost avoidance Some may be assigned as fraud investigations based on identified financial loss
Investigation Types Fraud Investigations: OIG investigates instances of alleged fraud in all programs administered by the department. Examples include: Cash, SNAP, childcare, Medicaid, etc. Vendor fraud and state employees alleged to be involved in program fraud or certain crimes against MDHHS. All investigations found to contain criminal activity are forwarded to the appropriate authority for criminal disposition or are sent to the appropriate area within MDHHS for administrative action. These cases are used to calculate overpayments Some may be assigned a FEE component where the fraud continues (e.g., OIG analytics identified the case for investigation and the worker was unaware of the fraud.)
Why ID Cost Avoidance? The primary impact of FEE investigations is the potential for taxpayer cost avoidance on cases that are denied, reduced or applications retracted by the household. Measuring/Calculating Cost Avoidance is a component of OIG s case management system. It is used to report out for: Annual Reports Legislative Requests Staffing enhancement requests System enhancement requests OIG investigators collect key data points at each FEE investigation disposition. Data is used by the case management system to automatically calculate and report on cost avoidance.
Automate for Efficiency MIGS tables are updated each fiscal year with average monthly household grants for each program/person. FAP = SNAP These amounts will be used in the cost avoidance calculation and may/may not be annualized. Medicaid-utilize average monthly capitation payment. For programs that affect one person for one lump sum, there is only one entry. It will not be annualized. E.g., SER or MA one-time (costly procedure).
Outcomes Impact The outcome chosen and agreed to by the Case Worker is used to determine if cost avoidance is counted. E.g.: Benefits Denied = Cost Avoidance Full Benefits = No Cost Avoidance Benefits Reduced = Partial (actual) Cost Avoidance is calculated
Data Collection At the completion of the investigation, the investigator identifies the number of household members affected by an outcome (e.g., Denial of Application), by program. The Case Worker will have an opportunity to agree or change the outcome, and dollar value of the actual cost avoidance.
Disqualification Value Don t forget the value of the disqualification when measuring program integrity efforts. OIG includes this number in annual reports, etc. The value is based on a monthly program amount for a single individual multiplied by the time period (months) of the disqualification: 1 year = 12 months 2 years = 24 months 10 years = 120 months Lifetime = 240 months (20 years was internally chosen)
Consistency Key Principles: Pick a method to calculate/measure cost avoidance and stick with it. o Provides a valid metric to compare year over year. Be able to explain how you derived your numbers. Improve on methodology as technology allows. When setting up our current cost avoidance formula, OIG reviewed the standard lifecycle of a SNAP case, which was 24 months in Michigan. OIG went with a 12-month multiplier to be conservative. In Michigan, for FY 2018, PARIS (Interstate, Federal and Veteran) matches resulted in $40.5 million in annual cost avoidance through OIG efforts.
Questions? David M. Russell, Director Operations Division Michigan DHHS-Inspector General 517-284-4010 (desk) 517-896-9597 (cell) RussellD3@michigan.gov
