On May 17, 2013, HHS published a rule change that will allow state Medicaid programs to use federal funds to data mine for erroneous and false claims. The rule change is expected to generate an estimated $60 million in additional recoveries over the next decade.

In order to obtain a portion of the approximately $12 million in additional funds, the requesting state will have to first demonstrate that they will:

-Coordinate the data-mining with state Medicaid agencies to agree on enforcement priorities and ensure that the programs are subject to audit reviews;

-Communicate with state Medicaid agencies to ensure that data-miners are using the most up-to-date interpretations of state-specific Medicaid regulations; and

-Train Medicaid fraud-control unit staff on the advanced computer-analysis skills required for data-mining.

For providers, this means yet another source of potential audit probes and overpayment demands. Medicaid providers already face scrutiny from the Medicaid Fraud Control Units as well as Medicaid Integrity Contractors, the latter being contracted companies that conduct post payment audits of Medicaid providers looking for erroneous claims.

The attorneys at Nicholson & Eastin, LLP represent health care providers in Medicare, Medicaid and private insurance audits, payments disputes and investigations. Please contact us for additional information if you need assistance with an audit.