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Latest Action Against Questionable Medicaid Providers Avoids Payments of $19 Million in First Six Months

“Prepayment review” prompts 37 to scale back billing more than 99%

North Carolina Department of Health and Human Services
For Release: Immediate
Date: October 17, 2012
Contact: Chrissy Pearson, 919-855-4840 or

Raleigh – The Medicaid section of the North Carolina Department of Health and Human Services today released data showing that efforts to curb expenditures for fraudulent or abusive claims are paying off to the tune of more than $19 million in a six-month period. The specific effort – placing 37 providers with questionable billing on “prepayment review” – triggered an overall 99 percent drop in their Medicaid claims to the state.

Many of the 37 were initially identified by North Carolina’s anti-fraud, data analysis software system designed to root out questionable billing practices in Medicaid. The software, designed by IBM, has already found nearly 200 providers with questionable billing worth $191 million. North Carolina is the first in the nation to use this software in the fight against Medicaid fraud.

Providers placed on prepayment review must have every one of their Medicaid claims thoroughly reviewed for compliance and for signs of fraud, waste or abuse prior to receiving payment. Because the state’s system processes some 88 million Medicaid claims a year, and federal regulators require prompt payment of those claims, most claims are paid without the closer scrutiny now possible with the IBM software.

The 37 providers cumulatively billed $19.2 million in the six month period prior to being placed on prepayment review. After DHHS took that action, their cumulative billing dropped to only $138,807. The cost avoidance for this action is just more than $19 million.

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