Medicaid director addresses fraud in budget

Friday, February 10, 2006 | 12:00 a.m. CST; updated 12:46 p.m. CDT, Monday, July 7, 2008

JEFFERSON CITY — Missouri’s Medicaid director estimated Thursday that up to 3 percent of the program’s budget could be consumed by waste, fraud and abuse.

Out of a projected $6 billion Medicaid budget for the fiscal year that starts in July, that percentage could amount to $180 million.

“Certainly, there is significant waste, fraud and abuse,” Michael Ditmore, state medical services director, said while testifying before a special Senate committee on Medicaid fraud.

The committee was formed in response to a December article in The Kansas City Star, which estimated that fraud and overbilling by doctors, therapists, dentists, caregivers and other Medicaid providers could cost Missouri as much as $575 million a year.

The Star’s figure was based on expert assertions that 10 percent of health care payments result from some kind of inaccurate, improper or unnecessary billing. The paper applied that percentage to what was estimated as a $5.75 billion Medicaid budget for the current year.

But Ditmore said he has seen no proven studies or reports of any Medicaid program where the percentage of waste, fraud and abuse is that high.

Asked by committee member Sen. Maida Coleman, D-St. Louis, to estimate a percentage, Ditmore responded with 3 percent.

“I don’t think it goes over that,” he added, “and it may well be less than that.”

From last July through December, the state’s Medicaid “program integrity unit” recovered $3.8 million in overpayments and identified an additional $6.6 million in overbillings that were not paid.

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