States can reduce costs by cracking down on fraud and abuse, which is an important source of inefficiency in the health care system. An agenda will help states target resources to the greatest areas of concern.

*Milestone details:

*Full name: Develop and implement an agenda to reduce fraud in the health care system.

*Relevance to the ACA:

The ACA has many provisions that seek to prevent fraud and abuse. It provides new powers to both state and federal governments and offers new avenues to investigate and address fraud in Medicaid, the Exchanges, and the commercial market. Relevant provisions include:

§1001 - Requires an external review process for individual and group market plans effective plan years after September 2010. Plans must meet state standards that include the NAIC’s Uniform External Review Model Act or regulations promulgated by HHS.

§1313 - Authorizes HHS to investigate the affairs of an Exchange and implement any procedure determined appropriate to reduce fraud and abuse in the administration of Exchange activities, including rescinding payments.

§1411 - Establishes a civil penalty for any person who knowingly provides fraudulent information when applying for coverage through the Exchange.

§6401 - Requires state Medicaid and CHIP programs to enhance their provider screening efforts according to standards HHS will determine.

§6402 - Provides the federal government with increased authority to investigate and level penalties for fraud in state Medicaid programs and allows HHS to withhold federal matching funding from state Medicaid agencies that fail to report encounter data to the MSIS.

§6504 - Requires Medicaid agencies to report an expanded set of data elements under MMIS to detect fraud and abuse. The specific elements are to be determined by HHS.

§6603 - Requires the Secretary to ask NAIC to develop a model fraud reporting form that private insurers can use to refer potential fraud cases to the state insurance department or, when appropriate, another state agency.