Medicaid fraud reform bills pass Legislature on bipartisan basis

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An overhaul of Washington’s Medicaid fraud recovery efforts to cut waste and recover taxpayer dollars was passed by the Legislature today with strong bipartisan support. A bipartisan group of legislators applauded progress made Thursday.

Experts from the National Conference of State Legislatures estimate the cost of Medicaid fraud accounts for 3 and 10 percent of total Medicaid expenditures. Washington spent $8.5 billion on Medicaid last year only to recover less than $20 million in fraud. At its most optimistic, the state’s recovery rate tops out at less than 1 percent.

Senate Bill 5978 will give the state new tools in pursuing Medicaid fraud with the hopes of raising tens of millions of dollars in fraud recoveries over the next few years.

Sen. Karen Keiser, D-Kent, chair of the Senate Health and Long Term Care Committee helped shepherd the package of fraud bills over the past two sessions.

“The bill allows us to be party to over 100 ongoing cases of multistate fraud around the country that already exist and are under way, that we are denied access to right now,” said Keiser. “In the last three years, Washington has missed out on our proportionate share of over $1 billion. Leaving such sums on the table during these difficult times is simply unacceptable. I’m proud that members of both parties were able to come together to enact this legislation.”

“Without this tough enhancement of our False Claims Act our state has been almost powerless against the corporate culprits who defraud taxpayers through false Medicaid claims,” said Sen. Cheryl Pflug, R-Maple Valley, prime sponsor of the legislation. “Fraud only leads to higher health-care costs, and as the Medicaid program grows the need to deter fraud grows as well. This bill also would help take away the incentive to commit fraud – to discourage the egregious corporate schemes that have raked in hundreds of millions of dollars.”

The bill was just one piece in a series of legislation designed to cut Medicaid fraud waste and abuse.

House Bill 2571, sponsored by Rep. Kevin Parker, R-Spokane, passed the Legislature today as well. The bill will reform the way Washington combats fraud and waste in medical services by focusing on prevention and early detection, as opposed to the state’s current “pay-and-chase” model.

“It’s exciting that Washington will be the first state in the country to reform its Medicaid system from a ‘pay-and-chase’ to a predictive modeling system. Projected savings for this legislation range from 30 to 150 million dollars,” said Parker. “This has been a steep climb and truly a bipartisan effort. This type of reform is possible when people of both parties tackle challenges together.”

A third bill, Senate Bill 6227, which did not pass, would have required the attorney general to establish a toll-free telephone hotline, enabling the public to report suspected Medicaid fraud as it happens. Sen. Steve Conway, D-Tacoma, prime sponsor of the bill, said he will pursue the hotline idea again next year. In the meantime, he said, Medicaid fraud reform in our state is now headed in the right direction.

“The inclusion of qui tam provisions in Sen. Pflug’s bill allows our state to go on the offensive against Medicaid fraud,” said Conway. “We can now begin to recover the untold millions we’ve lost by not being a part of this multistate pact.”

Senate Bill 5978 and House Bill 2571 now head to the governor to be signed into law.

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For more information:

Michael Althauser, Senate Democrats Communications, 360-786-7326
Eric Campbell, Senate Republicans Communications, 360-786-7503
John Handy, House Republicans Communications, 360-786-5758

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Washington State House Republican Communications
houserepublicans.wa.gov