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Is the Walker Administration Using Audits to Harass Family Planning Clinics?

Inspector says clinics were overpaid for Medicaid services

Aug. 16, 2016
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At precisely 3:38 p.m. on Wednesday, Aug. 3, a scary-sounding press release was sent to the media by the state Department of Health Services (DHS). 

According to DHS, the state Office of Inspector General found that family planning clinics they’d audited were significantly overpaid for services they provided to their clients who use Medicaid. In fact, the inspector general ordered that nearly 50% of Medicaid payments were in error and needed to be recouped. 

The problem?

The family planning clinics in question didn’t know about the inspector general’s findings.

Nicole Safar, public policy director for Planned Parenthood of Wisconsin, said her organization got a heads-up from a reporter who called for a comment after receiving DHS’ press release. As far as Safar knew, the organization was still in the preliminary audit phase and was waiting for the final report. 

“DHS put out this press release saying that these clinics have to pay back all of this money and they hadn’t even told us yet,” Safar told the Shepherd. “That is something that is highly unusual.”

DHS spokeswoman Elizabeth Goodsitt didn’t explain why the clinics weren’t told first, emailing, “The final notices of intent to recover … were sent on August 3rd.” 

So why these crossed messages? Safar explains that the audit news broke that same day that Planned Parenthood and its allies were asking a judge to be reimbursed for the legal expenses the groups racked up fighting Gov. Scott Walker’s new, restrictive hospital admitting regulations for abortion providers. A similar Texas law was struck down by the U.S. Supreme Court in June and the justices refused to review Wisconsin’s request to hear an appeal of this state’s law. That in effect struck down Wisconsin’s law and the plaintiffs, including Planned Parenthood, say that they are entitled to be reimbursed for their legal fees, estimated to be $1.8 million.

“I think I certainly don’t have to make the argument that we are being targeted,” Safar said. “That is not a coincidence.”

What’s the Cost? 

The state DHS is asking to recoup what the state says a handful of family planning clinics overbilled for Medicaid-paid services. The state pays 10% of these types of Medicaid expenses while the federal government covers 90%. The services in question are typical reproductive health services for low-income men and women, such as annual exams, dispensing of birth control and STD testing and treatment.

The Office of Inspector General began auditing a few family planning clinics a few years ago and preliminary audit findings in 2014 indicated they had overbilled the state a whopping $3.5 million in 2010 and 2011. When the clinics provided their rebuttals, that number dropped significantly.

According to DHS’ summary findings from another round of audits conducted in 2015, the state is attempting to recoup $63,812 from eight clinics—including Planned Parenthood clinics in Appleton, Green Bay, Madison and Milwaukee—for services provided in 2014. An estimated $5.5 billion of Wisconsin’s general purpose revenue is to be spent on all Medicaid services in the current two-year budget, so the family planning clinics’ alleged overpayments represent just a fraction of a drop in the bucket of Medicaid spending. 

Although the details of the clinics’ recent audits haven’t been released publicly, the auditor found that the overpayments were due to, for example, errors in quantity of prescriptions billed or dispensed, medical coding issues, lack of a prescription and reimbursement for a drug that wasn’t medically necessary.

No waste, fraud or abuse was found.

Jacquelyne Bodden, president of the Wisconsin Family Planning and Reproductive Health Association, released a statement supporting the organization’s members. 

“Based on the preliminary audit findings, it is believed that the auditors based some of their findings on misunderstandings of Medicaid policies and directives,” Bodden wrote. “Further, the Department wrongly claims that it is entitled to recoup payments for services that were provided, merely due to perceived documentation shortcomings—which do not call into question the actual provision of the service.”

Planned Parenthood is preparing to ask an administrative law judge to review the audit’s findings, Safar said.

“We are looking for some clarity on how the law should be applied and also an affirmation that if we are providing the services to eligible patients these minor imperfections in documentation are not reason to take back all of the money,” Safar said. “Let’s fix the imperfections.”

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