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Medicaid smart card idea raises questions

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Medicaid smart card idea raises questions

Post by Michfemale11 on Fri Mar 25, 2011 9:43 am

When Georgia’s state senators arrived at their chamber desks for a busy day of voting last week, each found a candy bar waiting for them.

“Vote YES on SB 63,” read each chocolate bar’s wrapper. “It’s a very $WEET deal for all Georgians.”

Senate Bill 63 proposed new photo IDs with “smart card” technology for Georgia’s Medicaid recipients. Supporters said the technology could combat fraudulent “card swapping” and “phantom billing” in the costly health insurance program for the poor.

But the bill’s origins raise questions about whether the bill represented a sweet deal for taxpayers or a potential boost for a business seeking a state contract.

The system would cost more than $23 million to implement at a time when Georgia’s budget is in dire straits and the potential payoff is uncertain.

The bill was not requested by the state government office that ferrets out Medicaid fraud. Instead, it was pushed by a fledgling South Georgia company in the anti-fraud business that got the ear of Sen. Tommie Williams of Lyons, one of the state’s most influential lawmakers. The bill called for Georgia to use a fingerprint-ID system like the one sold by Blackshear-based Exodus Payment Systems.

Williams, who asked a freshman senator to take the lead on the bill, says the state desperately needs a new way to combat Medicaid fraud. And Williams said he believes that using some kind of “biometric,” such as a fingerprint, is the way to go.

Card swapping or sharing might not even be a problem in Georgia. The inspector general for the state Department of Community Health said that in the past two and a half years, the state has received only five reports of someone trying to use another person’s Medicaid card. Only three were substantiated.

When the measure was being debated last week, Williams dismissed the notion that card swapping isn’t widespread.

“If they have only prosecuted three cases,” Williams said, “they’re not paying close enough attention.”

How SB 63 came to be

States and the federal government are searching for ways to combat health care fraud. Georgia spends about $1.7 billion a year to cover 1.6 million Medicaid and PeachCare for Kids recipients, with the feds kicking in about $5 billion more.

The Georgia Medicaid Fraud Control Unit and the inspector general assigned to Georgia’s Medicaid program use a range of techniques, from complex computer algorithms to old-fashioned police work. During the current fiscal year, the programs have already recovered about $29 million in state and federal funds.

Some senators say the success of the state’s current programs show the state is doing well at combating fraud and should get more resources. A new program aimed at card swapping is “a solution in search of a problem,” said state Sen. Nan Orrock, D-Atlanta.

But some state officials — including Sen. John Albers, who introduced the bill — say more needs to be done to stop fraud on the front end.

The idea for SB 63 began when businesswoman Joan Tibor McNeal met with Williams about a year ago. She told him about her company’s concept to stop fraud.

In an e-mail to The Atlanta Journal-Constitution, McNeal said her 2-year-old company developed a system that uses a fingerprint reader that could be placed in doctors’ offices, hospitals and pharmacies.

“The only way to prevent this type of fraud is by authenticating the person is who they say they are, and the status of their eligibility and making sure they are actually at the provider’s office,” she said in the e-mail.

Her company’s lobbyist, Blackshear resident Kay Godwin, is co-founder of Georgia Conservatives in Action, a group with close ties to Williams. (Godwin distributed the candy bars.) The group’s other co-founder, Pat Tippett, is Williams’ political consultant. Williams said he arranged a meeting for McNeal to make a pitch to the Department of Community Health, which runs Medicaid.

The department wasn’t interested, but Williams wasn’t deterred.

Williams recruited Albers, R-Roswell, to research and introduce a bill because of Albers’ expertise with technology. Albers is an executive at a financial services firm.

“I gave it to the freshman because I want them to learn how to pass a bill,” Williams said. “But actually the freshman is a whole lot better than I am. He understands the technologies. I don’t.”

Why the bill changed

The bill quickly attracted criticism for being favorable to Exodus. During a committee hearing, other vendors described the potential pitfalls of using fingerprints.

Albers said he did not write the bill with a specific vendor in mind, nor did Williams lobby him to do so. He said he simply thought the fingerprint technology was best and proven. “There’s no conspiracy there,” Albers said.

Criticism and debate changed the bill. The Senate approved a version that called only for a new picture ID that contains smart card technology with embedded information but not a biometric identifier such as a fingerprint.

The bill proposes a pilot program, but it’s unclear how much it would cost. With the fingerprint technology, the pilot would have cost an estimated $600,000 and a statewide rollout about $23.3 million — not including the costs of training, changes to software in the state system, additional staffing, or evaluating the program for effectiveness.

“We know fraud exists. We can’t measure it adequately right now, and that is the purpose of the project,” Albers said.

Georgia isn’t the first to consider such a system. Texas pioneered a fingerprint-based fraud control system for its Medicaid program, but it dropped the fingerprint component after the federal government questioned whether the program was cost-effective.

In Georgia, it’s now up to the state House to decide if a smart card system makes sense.

Opponents said that House members need to proceed cautiously. “When we look at something like this and you get a bill with a great title [Georgia Medical Assistance Fraud Prevention Program] ... and then you get a free candy bar, you better read it twice,” said Sen. Steve Henson, D-Tucker. “The substance of this bill is it’s going to be a poor allocation of state resources.”

Williams is still a believer. With a federal health care law on the horizon that will add hundreds of thousands of Georgians to Medicaid, Williams said the state needs to protect the program.

“I am just trying to stop some thievery,” Williams said, “and help the state’s bottom line.”
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