Aging & Disability Services Report | Audit | Government Health Care

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Millions of dollars in suspected fraud uncovered by state audit
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  LA18-04 S TATE OF  N EVADA   Performance Audit Department of Health and Human Services Aging and Disability Services Division 2016 Legislative Auditor Carson City, Nevada  For more information about this or other Legislative Auditor reports go to: http://www.leg.state.nv.us/audit (775) 684-6815.   Audit Highlights   Highlights of performance audit report on the Aging and Disability Services Division issued January 18, 2017. Legislative Auditor report # LA18-04. Background The Division develops,   coordinates, and delivers a comprehensive support system of services for  Nevada residents aged 60 and over, and children and adults with disabilities or special health care needs. Most of the Division’s expenditures relate to services for intellectually disabled  persons, which are primarily funded through state appropriations and Medicaid funds. Expenditures for these services totaled about $160 million in fiscal year 2016, mostly for  payments to SLA and JDT providers. SLA providers offer residential support services to individuals who require assistance to live in the least restrictive community setting possible. SLA services were provided to about 1,900  persons per month in fiscal year 2016. JDT  providers assist individuals in obtaining meaningful employment and living skills to help them achieve community inclusion, independence, and productivity. JDT services were provided to about 2,400 persons per month in fiscal year 2016. Purpose of Audit The purpose of this a   udit was to determine whether the Division has: (1) adequate controls over payments to providers of Supported Living Arrangement services and Jobs and Day Training services, and (2) effectively monitored these providers to ensure the safety and welfare of individuals with intellectual disabilities. The scope of our audit was calendar year 2015, although we included some activities in 2016. Audit Recommendations This audit report contains 10 recommendations to improve the Division’s oversight of providers of services to intellectually disabled persons. Six recommendations improve controls to ensure the Division only pays providers for services performed. Four recommendations help ensure the Division effectively monitors  providers to ensure the safety and welfare of individuals with intellectual disabilities. The Division accepted the 10 recommendations. Recommendation Status The Division ’s 60 -day plan for corrective action , the six-is due on April 13, 2017. In additionmonth report on the status of audit recommendations is due on October 13, 2017. Audit Division Legislative Counsel Bureau   Department of Health and Human Services Summary The Division needs additional controls to prevent   overpayments to providers of services to individuals with intellectual disabilities. Based on our test results, we estimate the Division overpaid providers a combined total between $3.5 million and $4.3 million in 2015. Overpayments to providers included those providing 24- hour care, as well as those providing jobs and day training to the Division’s clients. The combined total is based on overpayments identified in three areas: (1) overbilling issues for 24-hour care homes ($2.2 million to $ 3.0 million); (2) billing for more supported living arrangement (SLA) services than were agreed upon ($504,000); and (3) billing for more jobs and day training (JDT) services than were provided ($766,000). Improved controls would help ensure the Division receives the services it pays for and intellectually disabled individuals receive the services they need. Furthermore, by eliminating overpayments to providers, the Division can serve more clients. The Division paid a total of $106 million in calendar year 2015 to providers serving clients of the Desert Regional Center (DRC) and Sierra Regional Center (SRC). Some of the overbilling problems described in this report may be the result of provider fraud, while others may be unintentional errors. Therefore, as required by NRS 218G.140(2), we reported this information to the Governor, each Legislator, and the Attorney General. Although the Division has a thorough process for certifying SLA providers, the timeliness of certifying these providers needs to be improved. In addition, the Division has not yet developed a rigorous process for certifying JDT providers, several years after legislation was passed requiring them to do so. A well-developed certification process will include standards for the provision of quality care and training by JDT providers to the Division’s intell ectually disabled clients. Finally, the Division did not always have documentation showing that deficiencies noted during home inspections were corrected. Key Findings   We estimate the Division overpaid providers of 24-hour SLA services between $2.2 million and $3.0 million in 2015. Our estimate is based on a detailed review of about $550,000 in payments for about 1,800 days of service, which found overbillings of between 3.1% and 4.3% of the total billed. (page 7) The level of SLA services provided to the Division’s clients often varied from the level agreed upon . In about one-fourth of the days tested, the number of staff hours provided were less than the number established when the contract was developed. On days that clients are underserved, it can affect their health and welfare, as well as the safety of provider staff. Conversely, in about one-fourth of the days tested, the number of hours provided was greater than the number agreed upon. We estimate the Division overpaid providers of SLA services an additional $504,000 in 2015 for days when more hours were provided than were agreed upon. (page 10) For 27 of 150 (18%) JDT billings tested, the number of days billed was more than the number shown on providers’ logs of staff and client daily attendance or other records . We estimate the Division overpaid providers of JDT services about $766,000 in calendar year 2015. Based on the average cost of providing JDT services for a year, eliminating overpayments to JDT providers could have paid for JDT services to about 50 more clients for one year. (page 13) Our testing of the 29 largest SLA providers found 27 were not certified timely. Certification reviews include inspections and testing to help ensure that clients’ living conditions are safe and provider staff are properly trained and have cleared criminal background checks. (page 16) The Division’s certification process for JDT providers is limited to administrative requirements, such as verifying the provider has a Nevada business license. The process excludes criminal background checks, documentation of employee licensure, and proof of staff training. The Division has not yet adopted regulations with more rigorous certification requirements, as required by legislation passed in 2009. In addition, the Division has not documented that additional certification requirements from legislation passed in 2011 have been met. (page 18) Although the Division inspected homes timely, it did not have an effective process to ensure deficiencies identified during home inspections were corrected. In 14 of the 29 homes we tested that were inspected, corrective action was required to address deficiencies found in the home. However, for 6 of the 14 (43%) homes with deficiencies, the Division did not have documentation showing that corrective action was completed. (page 21)   Aging and Disability Services     Aging and Disability Services Division Table of Contents Introduction .................................................................................................... 1 Background .............................................................................................. 1 Scope and Objectives .............................................................................. 6 Division Overpaid Some Providers ................................................................. 7 Overpayments to Supported Living Arrangement Providers Were Caused by Various Factors ................................................................ 7 Uneven Levels of Services Resulted in Underserving Clients and  Additional Overbilling .......................................................................... 10 Overbillings by Jobs and Day Training Providers Were Not Detected ............................................................................................. 13 Monitoring of Providers Can Be Strengthened ............................................... 16 Timeliness of Certifying Supported Living Arrangement Providers Needs Improvement ........................................................................... 16 Certification of Jobs and Day Training Providers Is Inadequate ................ 18 Home Inspection Process Can Be Strengthened...................................... 21  Appendices  A. NRS 218G.140(2) Report Regarding Potential Provider Fraud ........... 23 B. Audit Methodology .............................................................................. 25 C. Response From the Aging and Disability Services Division ................ 30
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