It's hard to believe that Medicaid is a relative newcomer to the schools. In 1988, a change in federal law first allowed Medicaid payment for medical services provided to children under the Individuals with Disabilities Education Act (IDEA). By the early 1990s, school districts began to pursue Medicaid reimbursement in earnest, but unlike hospitals, many schools were not equipped to set up the billing infrastructure, train clinicians in the proper procedures, and handle the medical claims.
Enter the billing agents—including the nation's largest accounting firms. Many utilized their billing expertise responsibly, but some appear to have placed financial gain above compliance with the law, promoting maximization of reimbursement while tying their compensation to the amount of reimbursed funds. And the gains were sizeable—by the late 1990s, Medicaid reimbursement for services for the nation's poorest children had risen to $2.3 billion.
At the same time, much of this money has never returned to special education programs that generated the reimbursement, even though speech-language pathology services typically produce higher-than-average Medicaid revenues.
There was another unpleasant side effect to this intense growth spurt: Speech-language pathologists reported feeling pressure to approve claims as supervisors or providers of services on questionable—and possibly illegal—Medicaid claims.
The Education of a Whistleblower
A Texas SLP has emerged as a key plaintiff in a whistleblower lawsuit that alleges fraudulent Medicaid billing practices by a Big Four accounting firm in three San Antonio-area school districts. The lawsuit, brought by SLP Toni Barron and physical therapist Vicky Scheel under the False Claims Act (FCA), illuminates the weaknesses in Medicaid compliance in schools, which is currently under scrutiny by federal auditors.
Determining the true cost of "maximizing" Medicaid services is at the core of United States of America, ex rel. Toni R. Barron and Vicky J. Scheel vs. Deloitte & Touche, LLP, et al. In 1998 the two clinicians filed suit under the FCA, which allows citizens with evidence of fraud to sue on behalf of the federal government. Relators—as plaintiffs are called in FCA cases—must have direct and independent knowledge of false claims and a means of proving it. The Texas case is now under appeal in the Fifth Circuit Court of the United States.
In Texas, Medicaid covers the medically necessary School Health and Related Services (SHARS) program, which generates tens of millions of dollars in federal funds to more than 1,000 public school district providers. Barron and Scheel contend that Deloitte & Touche's role in developing SHARS reimbursement rates for the state and then serving as billing agent to hundreds of school districts created a conflict of interest. With compensation tied to reimbursement—with fees up to 20% of Medicaid revenues—the higher the rates were set, the higher the billing agents' fees. The company also served several school districts as an independent auditor and billing agent.
"Many clinicians don't understand the implications of dealing with Medicaid, especially the role of billing agents," said Barron.
"Our hope is that clinicians realize they need to know the rules for their own protection."
She also pointed out that she and Scheel did not target the school districts, who she says "followed the guidance of billing consultants who we believe knowingly engaged in fraudulent practices."
Deloitte & Touche, contacted by telephone and e-mail, declined comment on the lawsuit. "Typically we don't comment, but see how these cases resolve themselves," said John L'Abate, a spokesperson for Deloitte Consulting, which is most closely following the case.
Barron moved to Texas in the early 1990s—ironically, just as Medicaid made its entry into the state's public schools. Barron first practiced at a skilled nursing facility (SNF) and learned Medicare billing requirements. Later she obtained a Medicaid provider number as a private practitioner and billed Medicaid privately. Along the way, she became friends with Vicky Scheel, a colleague at the SNF who made the transition in 1993 to a school setting.
Barron began working part-time in the Judson Independent School District in 1996. She began getting a flurry of e-mails from Scheel, who was dismayed by information given by billing agents at her school in a neighboring school district.
"She couldn't believe what was being billed," recalled Barron. At Judson, she kept her distance from Medicaid and voiced her concerns directly. "I never submitted a claim at that school, and told my supervisor that I felt these services did not meet Medicaid criteria, and therefore, were not billable."
The supervisor accepted her decision, but later, when the billing agent gave a presentation to the special education staff, Barron grew uncomfortable. "He talked about the incredible income potential from Medicaid and said our school wasn't getting the speech revenue we should be, and they would look into it."
"He didn't have to look far," she said. "Every clinician had been assigned a billing number, and mine was the only one that hadn't been activated."
Between 1993 and 1997, Barron and Scheel worked as an employee or independent contractor in three San Antonio-area districts—the Judson, Northeast, and Southwest Independent School Districts.
With their experience in medical billing, Barron said she and Scheel knew "all the hoops you had to go through to comply with the law." What they knew about Medicaid rules, however, differed dramatically from what they saw in the school districts, which had reimbursement systems set up and implemented by the billing firm.
When the billing consultants arrived to train clinicians, "they set themselves up as the experts, but did not address medical necessity and documentation requirements. We were confronted with the rather aggressive instructions to bill for most of what we did," Barron said.
After a year at Judson, Barron moved into the Southwest Independent School District, where she supervised assistants who were asked to bill for services that weren't medically necessary.
"I felt very conflicted about being asked to sign off as a supervisor on this.The bottom line is, if it's not documented, it's not billable."
SLPs have long grappled with the requirement that services be provided "by or under the direction of" a provider who holds the CCC-SLP or who has met the equivalent educational and work experience requirements. Unfortunately, the federal government allowed each state to define "under the direction of," which has placed many SLPs in the precarious position of being asked to approve services rendered even though the level of supervision was tenuous. Another problem is that no nationally accepted definition exists of what is considered medically necessary, as opposed to educational services.
Nancy Huffman, chair of ASHA's Board of Ethics and a former school administrator of a speech-language and audiology program, urges clinicians to find out from their districts what agreements might be in place with CMS governing what "under the direction of" means in their district.
She advises providers to "be wary of practices that might be improper, such as identifying children who may not qualify for Medicaid, or providing more sessions than you think appropriate.
"You have to advocate for ethical practice," she says.
Adds Huffman, "Most school districts would not want to be in a situation of having to go to a school board to explain why they are giving money back to Medicaid.
"By knowing the rules, clinicians can be in a position to inform their supervisors of the consequences of non-compliance—and present the information in such a way that they are trying to protect the school district."
Listed as defendants in the case are Deloitte & Touche LLP, Deloitte & Touche Consulting Group LLC, Deloitte & Touche Consulting Group Holding LLC, and its separate consulting groups, Medicaid Solutions of Texas, another billing agent, and National Heritage Insurance Company, which monitored Medicaid billing and conducting audits if necessary. The clinicians allege Medicaid violations that include:
- Inadequate documentation. Federal guidelines require documentation of service dates, services performed at each contact, and the child's progress related to the medical service. The state requires progress notes. Barron and Scheel allege that the defendants "trained staff to maintain minimal records of services performed" and assured staff that "service delivery forms"—which relied on attendance—were sufficient.
- Unqualified providers and unsupervised assistants. Medicaid requires that SLPs hold ASHA certification or have equivalent educational experience, and that uncertified clinicians work "under the direction of" a qualified SLP. Barron and Scheel allege that billing was submitted for "professional services performed by unqualified or unlicensed health care practitioners and without the proper referral from a duly authorized physician." This practice also occurred in the Fort Worth school district, and resulted in high-level resignations after 1997 media reports that unqualified providers of speech-language pathology services were pressured to approve Medicaid claims.
- Individual billing for group services. In training sessions, billing agents instructed clinicians to bill individual rates for each Medicaid-eligible child receiving services in a group setting.
- Transportation. Medicaid sets strict limits on transportation reimbursement. Billing agents instructed clinicians to spread out days of service to maximize transportation billings and used software set up to bill automatically for round-trip transportation on any day when a service was given to a child with transportation in their IEP, according to the complaint. No transportation logs were maintained.
For more than three years Barron and Scheel sought assistance at the local, state, and federal level. They began by studying Medicaid law. "We went online and looked at the federal Medicaid Technical Assistance Guide and the state Medicaid plan. That confirmed our suspicion that the information given in training sessions was in conflict with state and federal requirements," Barron said.
The two then wrote memos to state agencies asking for clarification. "No one was interested. All they would say is that Medicaid was growing. In the end, we couldn't look to the state for support because the state portion of the Medicaid payment was waived, and thus the state had little incentive to monitor for fraud, which could reduce their revenues."
Although other clinicians worried about endangering their licensure, many had not worked in the medical or private sector and were unfamiliar with the requirements. "The consultants said they were the experts, and clinicians thought they knew what they were doing," she said. "And we were repeatedly assured that we would not be audited."
Some SLPs "believed the schools needed the money, and that they had no choice but to approve claims," she said. Once Barron talked with them, some quietly decided not to submit claims.
To overcome clinicians' reluctance to bill, the billing company held a mandatory "Documentation Day" in some districts, when clinicians brought their calendars and pre-printed service delivery forms to spend the entire day billing, with raffles and door prizes offered, according to the complaint.
"People wanted to do the right thing, but in many cases, they felt their job was at stake," Barron explained.
In the end, the denial of legitimate medical services to Medicaid-eligible children proved most galling to Barron and Scheel. "I received phone calls from SLPs in private settings telling us that if we billed at school for a child's services, they couldn't bill it," Barron said. "With claims submitted for services not received, we worried about harming students' ability to access health care."
Finally, Scheel spotted a notice about Taxpayers Against Fraud, and contacted them, and the group referred them to an attorney.
A National Problem
The Barron-Scheel case, first filed in 1998, highlights problems tha t extend far beyond the Texas borders, and has drawn the attention of Congress and federal auditors.
After a 1999 Senate hearing, Congress directed the General Accounting Office (GAO) to investigate administrative claims and other Medicaid school billing problems. The GAO's report, issued in 2000, indicated excessive and undocumented claims, a lack of safeguards at the state level, and inadequate monitoring by CMS. Following the release of the GAO report, ASHA held a series of meetings with CMS to discuss areas of concern related to speech-language pathology and audiology services.
The GAO report also led a two-year audit initiative on Medicaid school billing by the Office of Inspector General (OIG) of the U.S. Department of Health and Human Services. The audits are being conducted in 2002 and 2003 in states and cities across the country.
To date, more than 20 federal audits have been performed, and OIG has concluded that the federal government has been over-billed millions of dollars.
States targeted so far by federal audits include:
- Michigan. In a probe of the practices of Deloitte & Touche Consulting, LLP in Michigan, the GAO found that the company had paid school district officials $170,000 in perks—including luxury suites, theater tickets, and tickets to professional sports events—from 1997 through 1999. The officials were responsible for awarding the Medicaid billing contracts for a consortium of Michigan school districts. The tally for repayment of improper billing in the state totals $324 million, which the state is deducting from current and future billings.
- Illinois. A technical assistance review by the state released last fall reported a 67.5% error rate on Medicaid school billing performed by billing agents in 2001. Use of uncertified professionals, service/date discrepancies, and lack of service logs and medical records were among the infractions.
- Oklahoma. An April 2003 OIG audit report cites improper billing agency involvement, use of unqualified providers, lack of documentation, and billing for services that are not health-related, and asked for $2 million in repayments. Related to billing agents, the OIG cites federal regulation 42 CFR 447.10(f), which states that direct payment can be made to a billing agent only "if the agent's compensation for this service is … not related on a percentage or other basis to the amount that is billed or collected."
OIG auditors have also looked at billing in Maryland, New Jersey, New York, North Carolina, Oregon, Connecticut, and other states, as well as a number of cities.
Doing It Right
There are bright spots, however, in the Medicaid picture. In two important areas—educating clinicians to comply with the law, and returning Medicaid funds to special education programs—two success stories stand out.
- Medicaid training. The Virginia Department of Education (DOE) and the Department of Medical Assistance Services have offered an annual Medicaid training session for the past 12 years to update clinicians on the state Medicaid program and to offer training on documentation. This training has had a positive ripple effect throughout the state's school divisions, and "provides clinicians with an understanding of the consequences of not following Medicaid requirements," says Lissa Power-deFur, an SLP and director of student services at the DOE. Clinicians can obtain the same information by phone, she added.
- Recovery of Medicaid funds. In Pittsburgh, Ellen Estomin and other ASHA members spearheaded an effort to recover the funds generated by the speech and language program, to ensure they came back into special education services. The clinicians researched the issue and worked with their union, the Pittsburgh Federation of Teachers, which served as a bargaining agent with the school system. The union supported their effort and secured an agreement that the funds would be returned to the speech and language program.
To meet the challenges of Medicaid—especially the billing-related pressures— school providers need to learn the rules and speak up, says DeAnne Owre, a school-based SLP from Rhode Island and chair of Special Interest Division 16, School-based Issues.
"We don't have to accept practices that we believe are fraudulent," Owre said. "We need more accountability from billing companies to the federal government, and easier access to people who can help clinicians in difficult situations. We also need more information in graduate education courses and programs."
As federal auditors fan out across the country to probe billing records, Barron and Scheel continue to wait on the courts. The stress has taken its toll. If they win the case, however, the relators could receive 15% to 30% of the recovery, plus attorney's fees.
Whatever the outcome, Barron says her two children have learned an important lesson. "I've been able to show my kids that two single women in Texas can stir up the food chain all the way to the General Accounting Office. They know that what you do can make a difference."
Contact Marat Moore, managing editor for news, at firstname.lastname@example.org . Contact Toni Barron at Barron_Toni@msn.com . Watch for future coverage on the challenge of recovering Medicaid funds and returning them to special education programs.