Fraud, waste and abuse reporting

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Regulatory requirements

• Federal False Claims Act

• Deficit Reduction Act (DRA)  

• Anti-Kickback Statute (42 U.S.C. § 1320a-7b(b))  

• Marketing Guidelines and Requirements

• Sarbanes-Oxley Act of 2002

• Stark Statute

Review of provider claims and claims systems

Molina’s claims examiners are trained to identify unusual billing patterns that may indicate fraud, waste or abuse. When a claims examiner identifies a billing practice that appears inconsistent or concerning, it is documented and referred to Molina’s Special Investigations Unit (SIU) through the Compliance AlertLine and reporting system for further review.

Molina’s claims payment system uses automated edits and system flags to support accurate claims processing. These controls help ensure that claims are billed according to standardized billing practices, processed correctly and paid appropriately for services that are authorized and performed.

To maintain system accuracy and reliability, Molina conducts ongoing audits of claims data entered into the claims system. The claims department performs regular reviews to identify potential system issues or processing errors. When issues are identified, corrections are made promptly, and system edits are reviewed to determine and address the root cause.

Prepayment detection of fraud, waste and abuse

Molina’s claims payment system is designed to identify and prevent fraud, waste and abuse through real-time, prepayment claim auditing. Claims are reviewed concurrently using automated edits to detect and prevent payment of inappropriate or improperly billed services.

Molina maintains a comprehensive prepayment claims auditing process to identify common coding and billing errors and to ensure claims are submitted in compliance with applicable state and federal coding guidelines. Claim edits and code relationships are based on guidance from state Medicaid programs, the Centers for Medicare & Medicaid Services (CMS), the American Medical Association (AMA) and published specialty specific coding rules.

These edits are informed by nationally recognized coding and payment references, including:

• The National Physician Fee Schedule Relative File (NPFS)

• Medically Unlikely Edits (MUE)

• National Correct Coding Initiative (NCCI) files

• Local and National Coverage Determinations (LCDs/NCDs)

• State specific policy manuals and guidelines

• Indicators defined within the Medicare Physician Fee Schedule Database (MPFSDB)

In addition, at the request of a state program—or at Molina’s discretion—providers may be subject to prepayment review. In these instances, providers are required to submit supporting documentation to substantiate the services billed. Claims lacking sufficient or appropriate documentation will be denied until adequate, accurate support is provided.

Post payment recovery activities

The provisions in this section are part of the Provider Agreement and are intended to supplement, not replace, Molina’s rights and remedies under the Provider Agreement or applicable law.

If there is any inconsistency between this section and the Provider Agreement, Molina may apply the Provider Agreement, this section, applicable law or a combination of these, as appropriate.

To support accurate payment and program integrity, providers are required to allow Molina, governmental agencies and their authorized representatives reasonable access to records necessary to verify compliance with the Provider Agreement, including the review of potential fraud, waste or abuse. Records should be readily available at the location where services are provided to Molina members.

Examples of records subject to audit include, but are not limited to, medical records, patient charts, billing records and coordination of benefits documentation. Providers are expected to submit requested records in a timely manner, as specified by Molina, and at no cost to Molina. If an audit identifies fraud, waste or abuse, providers agree to repay any amounts determined to have been paid in error, or Molina may pursue recoupment as permitted.

If a provider does not allow access to requested records, or does not submit requested documentation for a claim, the payment associated with that claim may be considered overpaid and become due and payable. Molina may recover these amounts through recoupment or offset against future payments as allowed under the Provider Agreement.

Providers are expected to respond promptly and fully to documentation requests. Claims for which required documentation is not provided during the audit process are not eligible for reimbursement and may be subject to chargeback.

Providers acknowledge that the Health Insurance Portability and Accountability Act (HIPAA) permits covered entities to disclose protected health information for payment activities (see 45 C.F.R. §§ 164.501 and 164.502). Providers further acknowledge that, as part of the payment process, Molina is permitted to review relevant records to confirm services rendered and payments requested, and that such reviews are permitted under HIPAA and other applicable privacy laws.

Claims auditing

Molina uses established industry standards, clinical practices and applicable state and federal guidelines—along with Molina policies and data—to evaluate the accuracy and appropriateness of claims billing, coding and payment.

Providers acknowledge Molina’s right to conduct both prepayment and post payment claim audits. Providers are expected to cooperate with Molina’s Special Investigations Unit (SIU) and audit activities by providing reasonable access to requested claims information, supporting medical records, charging policies and other relevant documentation needed to support billed services.

Medical records must be submitted or made accessible upon Molina’s request. Failure to provide requested documentation in a timely manner may result in audit findings, claim denial or identification of an overpayment.