There is a solution for Medicaid fraud—innovation

In 2020, Medicaid fraud was estimated to be close to $86.5M. It is a staggering figure burdening taxpayer. And clearly, more needs to be done to remedy a situation where fraud is so pervasively present in a program that cares for the most vulnerable patients.

The FBI lists several main types of fraud: double billing, submitting multiple claims for the same service; phantom billing, billing for a service visit or supplies that the patient never received; unbundling, submitting multiple bills for the same service, or charging more for a service that is usually part of a package; upcoding, billing for a more expensive service than the patient actually received; and over-billing, charging the government for medically unnecessary drugs, procedures, or drugs.

Medicaid patients are particularly vulnerable to physicians' fraudulent practices, as they have no easy access to their medical records. For example, a doctor might falsify or exaggerate a diagnosis to facilitate over-billing. The patient may be subject to unnecessary or unsafe medical procedures. 

They are also vulnerable to individuals asking for their insurance identification number and other personal information to bill for non-rendered services. Or their identity may be stolen, and they would find themselves enrolled in a fake benefit plan. 

To battle rampant Medicaid fraud, a new healthcare delivery model holds great promise: Value-Based Care (VBC). The VBC formula stipulates that doctors get compensated according to the longer-term well-being of their patients. The healthier the patients, the greater the compensation for the doctor. In sum, doctors are encouraged and put in a position to do their very best for the people under their care.

The model, as instituted by the New York Department of Health in 2014, was called Delivery System Incentive Payment Program (DSIRP). It provided for an iron-clad protocol that would make fraudulent practices pretty much impossible. Its success is exemplified by the achievements of SOMOS, a network of 2,500 inner-city physicians caring for some 1 million of New York City's most vulnerable Medicaid patients, mostly Hispanics, African Americans, and Asian Americans. 

To make the VBC model work, doctors must carefully maintain patients' Electronic Health Records (EHR), which would periodically be sent to the Department of Health for assessment. That is when it is determined if the patient population is showing signs of enduring health, which in turn governs the doctor's compensation level. Maintaining the EHRs is a job for both doctors and their staff. Fraudulent records would be readily flagged.

Record-keeping also plays a role in Patient-Centered Medical Homes (PCMH). SOMOS staff works with medical practices to turn them into a one-stop portal where a patient's entire care history is recorded, allowing the doctor to keep track of which services a patient receives, be they medical, behavioral, or social. The social refers to doctors keeping track of patients' social issues that may impact their health, such as substandard housing, unemployment, and poverty. Again, a careful electronic portrait of the patient is maintained, with both doctor and staff doing the record-keeping. Fraudulent entries would quickly be spotted.

Now, doctors prone to committing fraud would be ill at ease being part of VBC, even though such physicians would see their income increase, a factor that prompts their criminal behavior. Ideally, VBC would make honest men and women of them. However, it is hard to picture a less-than-ethical doctor in the SOMOS VBC system, which revolves around a close patient-doctor relationship. That bond is created as physicians earn the patients' trust by getting to really know them, their families, and their circumstances. For much of that intimate detail, SOMOS doctors rely on Community Health Workers as their eyes and ears in the community. Given the stature of SOMOS doctors, it is difficult to imagine fraud-prone physicians, with far less than adequate concern for the well-being of their patients, earning such a position of trust.

Above and beyond traditional Medicaid's vulnerability to fraud and waste, there is a relatively poor record of delivering health care to the most vulnerable. Needy patients, people of color among them, often have a difficult time gaining access to the care they need, given the labyrinthine network of doctors to whom, on paper, they have access. A famous Oregon study (conducted in 2009/2010) found that people with Medicaid coverage showed no significant positive effect on major medical conditions—including hypertension, diabetes, and high cholesterol—compared to those without coverage.

SOMOS saved US taxpayers $330M by reducing by 25 percent both unnecessary visits to the emergency room and unnecessary and costly hospitalization. That is the fruit of Value-Based Care. It is high time for traditional Medicaid to be dismantled and for VBC to be rolled out system-wide. Doctors, patients, and taxpayers stand to benefit greatly.

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SOMOS: May we be like the sandalwood tree…

Since its very beginnings, SOMOS Community Care was founded and has developed as an organization with the mission to create and cultivate a collaborative network of primary care physicians and their clinics. Our goal is to implement an innovative and revitalized model of healthcare that prioritizes the needs of our community’s most vulnerable and underprivileged individuals, focusing especially on migrants in New York City.

The highest moral principles inspire us in our pursuit of the common good and we dedicate ourselves to the health and well-being of those we serve. Strong ethical values guide our healthcare organization in the interpersonal relationships we form within the company as well as in how we manage all economic and administrative aspects of our operations.

Our doctors focus on primary and family healthcare with a preventive approach and aim to relieve the strain faced by hospitals. We do this by championing a model where hospital institutions attend to patients with the most urgent and prioritized needs.

Through the years, we can trace the success of our healthcare services, as I have said, to the integration of hundreds of physicians and their clinics, as well as the government funding we have secured through the DSRIP program for state healthcare system reforms. We have been awarded this funding based on our exceptional results and competencies, which allows us to continue developing our mission and vision already detailed above. These results include reductions in the statistics that track stress on hospital emergency systems and reductions in rates of unnecessary hospitalizations.

Our healthcare model emphasizes prevention over treatment, and, as much as possible, healthcare is delivered in the patient’s respective culture, customs, and language by physicians who are immigrants themselves. This model not only enhances the MEDICAID system, but it also reveals, let’s not forget, the difficulties that our organization’s work may face with the traditional hospital system, because, due to a lack of prior, personalized, and preventive care, large numbers of patients who do not need emergency services, or even hospital services at all, attend these facilities.

As the CEO of SOMOS, I can attest to the ethical standards, transparency, and honesty with which we manage our financial resources, the code of ethics that exists at the very heart of our organization, and the desire and spirit that drives us to continually improve our service to the health and well-being of all, particularly the most at-risk members of our city.

 We strive to ensure that all professional services contracted for the development or promotion of SOMOS are executed and compensated accordingly. Likewise, we also strive to guarantee that the healthcare services our network of affiliated physicians provides bear the hallmark of scientific excellence, efficiency, timeliness, and solidarity that the invaluable nature of healthcare demands.

At SOMOS, we are committed to promoting the highest and noblest values of the human spirit both within and outside our organization. We have fostered collaborative, non-denominational partnerships with various religious institutions, including Catholic, Muslim, Jewish, and Protestant denominations.

Our shared pursuit of the common good and the provision of healthcare, as integral values that support individuals, families, and society, has brought us together with these religious organizations. We have supported each other, especially during the pandemic, by utilizing their places of worship to facilitate health campaigns within their communities.

This collaborative work with religious communities has allowed us to personally connect with and draw inspiration from spiritual leaders such as Pope Francis, who continues to inspire us and all of humanity.

The prestige that SOMOS has earned with the passage of time can be traced to the vital healthcare services we have provided to our city, particularly during the COVID-19 pandemic. Also, our humanistic vision and solidarity with those who suffer the most have driven us to extend our services, focused attention, and targeted assistance to communities experiencing catastrophes and emergencies in Haiti, Cuba, the Dominican Republic, Puerto Rico, and beyond.

We aspire to continue to be an increasingly recognized and sought-after healthcare organization. We aim to expand and enhance our services over time, and to achieve this, we hope to continue relying on local, state, and national government support that aligns with our accomplishments, competencies, and workforce contributions.

Neither individuals nor institutions are immune to the challenges of competition, power dynamics, economic fluctuations, and political turbulence that are intrinsic to every society. At SOMOS, we see ourselves as a vital and dynamic component of the social fabric, embracing the risks associated with being an active and productive entity within society. We appeal to the trust of all in our vision and commitment to healthcare as we continue to grow and thrive.

Acknowledging the difficulties that all of us may encounter, individuals and organizations alike, be they due to internal or external causes, we, at SOMOS, strive to be, in the words of Nobel Laureate Rabindranath Tagore, like the sandalwood tree that perfumes the very axe of the woodcutter that lays it low.

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