Auditors recommend improvements to MCO’s special investigative unit

The OIG audited the Community First Health Plans, Inc. special investigative unit (SIU) and determined it did not consistently meet requirements designed to reduce fraud, waste and abuse.

As a managed care organization (MCO) for Medicaid and CHIP, Community First is required to establish an SIU to investigate fraudulent claims and other program waste and abuse by members and service providers. This measure is in place to ensure Community First, which received Medicaid payments of $526 million in 2019 and $571 million in 2020, administers certain programs in a way that protects Texas health care funding.

The audit objective was to determine if Community First’s SIU followed state and contractual requirements related to preventing, detecting and investigating fraud, waste and abuse from September 1, 2019, through August 31, 2020. Auditors also reviewed if Community First was reporting reliable information on SIU activities, results and recoveries to the Texas Health and Human Services Commission.

The OIG determined Community First did not consistently meet contractual requirements in these areas and made recommendations that will improve the timing and documentation of its SIU efforts in both preliminary and extensive investigations, reporting to OIG, and its fraud, waste and abuse training. Specifically, Community First did not consistently:

• Ensure preliminary investigations contained required elements and met required timelines. Include the date of the allegation on its log of incidences of suspected fraud, waste and abuse.
• Ensure sample sizes for extensive investigations met requirements.
• Meet or sufficiently document all timeline requirements for extensive investigations.
• Include all opened investigations on the monthly open case list report.
• Refer all extensive investigations of possible acts of fraud, waste or abuse to OIG, or document why those extensive investigations with findings and recoveries were not referred to OIG.
• Remit to OIG half of all amounts recovered as the result of a fraud and abuse determination.
• Submit referrals for possible acts of fraud, waste, or abuse to OIG within the required timeframe.
• Ensure staff and subcontractors completed fraud, waste and abuse training within the required timeframes.

Auditors did find that Community First met certain requirements related to staffing the SIU, training, monitoring service patterns, and remitting funds recovered. For the full audit, click here.