The Centers for Medicare and Medicaid Services Medicaid Integrity Group (CMS-MIG) is currently auditing the Texas Medicaid Program. A Medicaid Integrity Contractor (MIC), Health Management Systems (HMS), is auditing outpatient prescription drug claim payments submitted by some Texas Medicaid pharmacy providers. The audit is designed to identify instances of fraud, abuse, or waste, including overpayments to individuals or entities for prescriptions or other items.

CMS-MIG Review Process
Section 6034 of the Deficit Reduction Act (DRA) of 2005 (Public Law 109-171) requires CMS to review the actions of persons or entities that furnish services or items under a state's Medicaid program. HMS may ask selected Medicaid providers for prescription drug claim documentation and other information as part of the audit. The audit is intended to determine whether Medicaid provider payments were:

• For services provided and properly documented.
• For services billed properly using the appropriate procedure codes.
• For covered services.
• Reimbursed appropriately according to state policies, rules, or regulations.

CMS-MIG has contracted with the following MICs to perform these audits:

• As the Audit MIC, HMS will conduct post-payment audits of Medicaid providers, perform a combination of field audits and desk reviews, identify overpayments, and initiate fraud referrals.
• As the Review MIC, AdvanceMed will review providers to identify potential inappropriate or unnecessary Medicaid expenditure of funds and potential fraud, waste, and abuse through data analysis, and perform risk assessments of Medicaid data including, but not limited to, claims for payment under Title XIX Medicaid.
• CMS-MIG plans to select an Education MIC to educate pharmacy providers, beneficiaries, and others about payment integrity and quality of care issues.

HMS will notify providers who are selected for audit and will request prescription drug claim documentation and other information as part of the audit. If selected, you must furnish the requested information within the allowed timeframe.

Failure to Provide Pharmacy Records in a Timely Manner
Failure to provide the information requested in the designated time frame may result in claim payments to the pharmacy being recouped.

Disclosure of Patient Information
The release of patient medical records to HMS is allowed by federal law and Texas Medicaid policy. The Health Insurance Portability and Accountability Act (HIPAA) of 1996 (Public Law 104-191) and federal regulations that implement HIPAA (45 C.F.R. parts 160 and 164) authorize the collection and review of protected health information contained in individual-level medical records for payment review purposes.

Contract Compliance
Section 1902(a)(27) of the Social Security Act requires a Medicaid provider to retain records necessary to fully disclose the extent of services provided to a Medicaid recipient and to furnish CMS with information about any claims for payment for services rendered.

Providers selected for audit will have an opportunity to review and comment on HMS' preliminary findings prior to a final report being issued to the Texas Health and Human Services Commission and CMS-MIG. A provider may be required to refund any payments HMS determines were incorrectly paid. Providers selected for audit will be given specific instructions on how any refunds are to be paid or recouped, and how audit determinations may be appealed.

For questions or additional information, please contact Cindy Jorgensen at (512) 487-3333. 
E-mail correspondence can be sent to CMS-MIGProgramAudits@hhsc.state.tx.us.