August 10, 2006

The House Special Committee on Medicaid organized at Speaker Jetton’s request held hearings regarding Medicaid Fraud legislation. Discussions were also held on how the fraud legislation relates politically to the restoration of Medicaid coverage to 3,200 disabled Missourians. (MAWD Chairman Representative Schaaf, Representatives: Tilley, Wilson, Swinger, Threlkeld and Nance were in attendance. Representatives: Page, Hunter Skaggs and Wright did not attend.)

The hearing as in the Kansas City hearing focused primarily on the difficulty of coding Medicaid filings and the differences between the House and Senate versions of the Medicaid fraud legislation. Six medical doctors testified before the committee.

The testimony focused on several items.

• The need for higher reimbursement to Medicaid providers to ensure more access to providers. The doctors testifying remarked that the bureaucracy of filing for Medicaid discourages physicians from taking Medicaid patients.
• If fraud legislation is passed, doctors will be hesitant to take Medicaid for fear of being prosecuted for clerical error from incorrect billing.
• Representative Schaaf focused on his concern that increased penalties from fraud would further reduce access to care for Medicaid patients.
• Representative Threlkeld commented that “undercoding” is currently considered a crime and that one physician inadvertently committing billing errors could impact an entire “group”. Threlkeld also pointed out that Medicaid fraud is not a problem with doctors, it is more focused on durable Medicaid equipment, transportation and other providers.
• Medicaid patients currently are waiting months (6-9) for specialist visits. The committee does not want to exacerbate the situation.

The federal government has established incentives for states to pass Medicaid fraud legislation.

The committee discussed the actual payback to the state if a proposal was enacted in Missouri. The federal government would reimburse the state in a percentage from the amount recovered by the state for Medicaid fraud. At this time, they were unsure if the amount justified additional statutes being passed.

The committee then held a discussion regarding the differences in the House/ Senate versions of the measure. Generally, the House would like to have a more lenient version of the penalties. These included reductions on 1st offense from a class C to class D penalty and on the 2nd offense from a class C to class B. Representative Threlkeld pointed out that the Senate version was comparable to heinous crimes such as murder. Further reductions were proposed.

The key striking point relates to the term “private cause of action” allowing private citizens to file complaints. Federal legislative guidelines require this component

The Senate version has this language. The House proposal does not and the House members will not agree to this language.

At this juncture, Chairman Schaaf will not move and unless Senator Koster, the Senate bill handler, agrees to the House language there will be no bill.

Consequently, Schaaf with the agreement of his committee commented there is no need for a special session if the fraud bill is part of a package where MAWD is tied to the Medicaid fraud bill.

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