Maine is paying for Medicaid fraud and abuse, just not the way you’d expect.

Dentists treating patients through MaineCare, the state’s Medicaid program, have been issued fines totaling around $800,000 as the result of a new auditing system. But instead of identifying improper payments or benefits, the audits are penalizing clinics for what appear to be minor clerical errors. And instead of improving care and streamlining services, the system is threatening access for low-income residents to dental care and soon, perhaps, mental health and substance abuse treatment.

The Maine Department of Health and Human Services put the auditing system in place to comply with the federal Affordable Care Act, and the problems could be seen as an unintended result of a complex and new program. But the state has so far offered a weak reply to the dentists’ concerns, and further delay to erase the exorbitant and unfair fines and repair the auditing system would be a clue as to the motive of the LePage administration, which has shown an antipathy toward MaineCare in general.

Medicaid reimbursements are particularly stingy, as low as 50 percent of the cost of services in some cases. As a result, many health care providers limit the number of MaineCare patients they serve, and many children enrolled in MaineCare go without seeing a dentist.

That makes the clinics that do treat low-income patients all the more valuable, and they are the ones being harmed by the overzealous auditing system. The Community Dental Center in Waterville, for instance, is being fined $58,000 for what it says are inconsequential coding errors, an amount that could cause the small clinic to close its doors. Falmouth Pediatric Dentistry, which co-owner Michael Dowling said treats about 10,000 MaineCare patients, also was hit with a “substantial” penalty.

The fines, said Dowling, have the “potential to completely destroy the safety net.”

The fines, which are actually orders by DHHS for the clinics to return a portion of the money they’ve been paid for services, also may have a wider impact than limiting dental care. The same audits also will be used on other services paid for by Medicaid, such as hospital visits, nursing homes, and mental health and substance abuse treatment.

Fortunately, Maine can easily avoid that result. While the Affordable Care Act mandates some form of auditing, it gives states wide latitude in shaping the system. In fact, a large part of the problem is that the private contractor in charge of the audits is paid based on how many errors are found, giving the company incentive to point out errors no matter how inconsequential they may be.

The contractor, New York-based HMS, also is using a sampling method in the audits, picking out a small number of patient records to search for errors, then extrapolating the findings to all of a clinic’s records. Maine dentists say HMS is purposely placing among the samples records that have a higher chance of containing errors, thus making the extrapolations inaccurate.

This is a simple problem to fix. The state could change the system so that the auditing company is paid a flat fee. Or it could limit extrapolation, or give significant fines only for major errors.

In any case, the state needs to alter the auditing system so that it helps health care providers fix these minor errors without disrupting the important care they provide to Maine residents.

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