Understanding and Preventing Fraud, Waste, and Abuse within a Self-Directed Service Delivery Model

Fraud, waste, and abuse is a common phrase heard throughout the medical and social services industry. Understanding what this means and how to prevent it is a key concern for state Medicaid agencies, managed care organizations, and self-direction program staff. We’re going to break down each of these topics and provide examples of steps you can take to prevent fraud, waste, and abuse.

Fraud occurs when someone provides false or misleading information for the purpose of getting paid or reimbursed for services, such as providing false information on a self-directed worker’s timesheet. Examples of fraudulent timesheets include requesting payment for time not worked, forging a signature on a timesheet, or coercing someone into handing over part of their payment.

Waste is really the overutilization, underutilization, or misuse of resources. Waste is typically not considered an intentional act. Examples include the costs incurred when an individual receives more services (hours or units) than necessary, like when an individual’s health improves but their intensity of support remains the same.

Abuse refers to practices that are inconsistent with financial, business, or medical practice and result in unnecessary costs to the social services programs like Medicaid or result in payment for services that are not medically necessary or fail to meet professionally recognized health care standards.

Steps you can take to prevent fraud, waste, and abuse include:

  • Reviewing timesheets and vendor payment requests to be sure that the information is accurate.
  • Never let anyone, besides a designated authorized representative, sign a timesheet or vendor payment request on your behalf.
  • Pay close attention to your budget and your utilization patterns to ensure you are not overutilizing your budget funds.
  • Be sure to report to your FMS anytime you are hospitalized or admitted to any sort of inpatient facility so we can utilize our internal system controls to prevent your worker(s) from submitting timesheets during the inpatient stay.
  • Report worker terminations timely so we can remove their access to the appropriate systems and prevent their ability to submit timesheets after termination.
  • Never share your system login information with your worker(s) or others to prevent unauthorized access to your information.

State law, the federal False Claims Act, and the Social Security Act anti-kickback provision all have mandated reporting requirements for suspected fraud, waste, and abuse of public funds. Each of these laws impose penalties for committing fraud, waste, or abuse and for failing to report it. Penalties range from losing public assistance benefits to monetary fines to potential jail time.

Do your part to protect public funds and the integrity of the self-directed service delivery model!

by Victoria Evans
Senior Director of Client Engagement

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