A new sheriff policing Utah Medicaid
Here's how an investigator tasked 14 years ago with rooting out fraud, waste and abuse in Utah's Medicaid program described his job: cast a wide net and aggressively investigate fraud, but use resources wisely.
Jeff Wright's motto "Big cases equal big problems, little cases equal little problems" could easily serve as the motto for the newest sheriff policing Medicaid, Utah's first inspector general, Lee Wyckoff.
No more six-month investigations yielding $1,300 in fines, Wyckoff said at a legislative briefing in October. "That's not a good use of our resources. If there's fraud, waste and abuse, let's find it. But let's find it efficiently."
Whether the 35-year-old auditor can succeed where others have failed remains to be seen.
One of his first orders of business was to reorganize his assigned team of 19 investigators and support staff, firing one employee and hiring several others with "heavy" talent in computer systems.
The shake-up didn't ruffle lawmakers, who, like Sen. Allen Christensen, R-North Ogden, voiced worry instead that "heavy talent" will mean "heavy-handed" investigatory tactics.
And there, perhaps, lies Wyckoff's greatest challenge being an effective watchdog and protecting taxpayer funds without alienating the declining number of doctors willing to treat Medicaid patients.
It's a tough balancing act, admits Wyckoff, who says he applied for the Office of the Inspector General job after seeing it advertised. "But I like the challenge," he said.
His strategy is one of cost avoidance. A lot of waste and abuse is due to honest billing errors, which Wyckoff vows to help providers avoid through education and outreach.
"I'm not very forgiving of fraud. When I find that, I go after it, even if it's small fraud," he said, explaining how he'll leverage technology to monitor claims and zero in high dollar cases. "But I've never managed audit functions with a 'gotcha' mentality. That's one of the things you won't find with me."
A crackdown cycle • Wyckoff's position was created to remedy waste and abuse of Medicaid funds identified in a series of legislative probes.
Lawmakers decided that the problem wasn't that no one was watching, just that the watchdogs worked for the same agency that oversees Medicaid, the Utah Department of Health.
Rep. David Clark, R-Santa Clara, likened the arrangement to "the proverbial fox guarding the henhouse." So Clark, who stepped down Jan. 5 to campaign for a seat in the U.S. Congress, sponsored legislation creating an independent Office of the Inspector General (OIG).
But the problem and proposed fix were hardly revelatory, said Wright, who in 1998 was an investigator at the state's Medicaid Fraud Control Unit.
"The Legislature has been aware of [fraud] for many years, and in fact are responsible for allowing it to continue," he charges, blaming politics for the thwarting of past efforts to pursue fraud.
Like the newly created OIG, which reports to the Governor's Office of Planning and Budget, Wright's unit was independent, housed at first in the Department of Public Safety and later transferred to the Utah Attorney General's Office.
It was well-funded and staffed, answering primarily to the federal government, which funds such policing functions and shares in any money recouped.
Using statistical algorithms, the unit investigated numerous providers, clinics and doctors, recovering funds through the criminal and civil means, recalled Wright, who is now retired and still living in Salt Lake City.
Two providers, he said, were even found to be "up-coding," or overbilling Medicaid, a practice that persists today in clinics throughout the state, according to legislative probes.
But attempts to prosecute those early cases were foiled after the providers complained to lawmakers of overzealous investigations and countersued the state, said Wright.
State officials dismantled Wright's office, fired the statistician and reassigned Wright and his supervisor.
"They basically neutered the unit and placed it under the health department, which had to approve all investigations. But their motivation is to retain providers who can always threaten to drop Medicaid," said Wright. "The message to providers was you can do whatever you want to do."
Pushing back • Taj Becker, one of the doctors targeted back then, tells a different story.
Investigators showed up at the St. George neurologist's office in 1998, demanding access to her records. After amassing evidence of alleged overbilling they dangled two offers of civil penalties, for $107,000 and $49,000, in exchange for not pursuing criminal charges. She refused and complained to lawmakers about the state's "bullying practices."
In 2000 prosecutors filed criminal charges, which were later dropped.
"I think they felt they had some procedural problems with the case that were going to be hard to overcome and because of that didn't pursue it," said Assistant Attorney General Joel Ferre, who defended the state against the counterclaim that Becker later filed. "There was evidence that we presented at trial that she had up-coded, but it was a question of how much and her culpability."
After the charges were dropped, the Medicaid Fraud Unit mentioned the Becker case in a federal report, which was published on the Internet. Becker sued in 2002, accusing authorities of defaming her and retaliating against her for protesting their tactics.
After 10 years of litigation that eventually reached the 10th Circuit Court of Appeals, Becker prevailed on the defamation claim with a jury award of $10,000. Wright was not named in that claim.
"It was pretty rough, hard on me emotionally and financially," said Becker, who says she spent hundreds of thousands of dollars on lawyers' fees and had to cut her 70-hour work week in half.
She is still in private practice, but no longer seeing Medicaid patients. "I simply can't afford the overhead, the [low] reimbursement and the potential costs of another meritless prosecution," she said.
Becker, a member of the politically conservative Association of American Physicians and Surgeons, believes fraud happens, but rarely in Utah. She's afraid that Wyckoff, needing to justify his salary and $2 million overhead, may be compelled to push limits.
"Nowadays they're getting smarter and pursuing these cases outside the courts, administratively, because there's a lower burden of proof," she said.
Launching a "tight ship" • Expectations are high. In 2010, the A.G.'s office, with help from Health Department auditors, recouped $10.1 million in over-billings.
Legislative auditors predicted that Utah could save as much as $20 million by more closely examining Medicaid claims.
Wyckoff hasn't set a collections goal, saying that would be irresponsible.
Explaining the personnel changes he made, he said, "Part of my fiscal responsibility is to operate a tight ship and that means having the right people on board."
The soft-spoken Maryland native got his start in the private sector, working most recently as regional vice president of internal audit for one of the nation's largest insurers, Wellpoint's Anthem Blue Cross Blue Shield in Denver.
He is intensely private, declining to say much about personal life, other than he enjoys skiing and other outdoor exploits. He is unmarried, but dating, and has a black lab named Coal.
What got him into auditing, he says, matters less than what keeps him there. "I like finding business processes that are broken and working with people to fix them," he says.
Medicaid may be a different animal than private insurance.
"But auditing is auditing," said Wyckoff, who has asked State Auditor Auston Johnson to scrutinize his own office's books. "The only real difference with this job is there's a direct link to the taxpayer. They are paying money to find money on their behalf. That's my focus here, and something I take quite seriously."
What is Medicaid?
Medicaid is a state and federally funded program that provides health insurance to about 230,000 low-income Utahns.
Who is Lee Wyckoff?
Lee Wyckoff is Utah's first Medicaid inspector general. He took the post Aug. 8 and is being paid $104,582 to oversee more than 20 investigators and support staff. He reports to Ron Bigelow, director of the Governor's Office of Planning and Budget.
Most recently, Wyckoff spent two years as regional vice president of internal audit for one of the nation's largest insurers, Wellpoint's Anthem Blue Cross Blue Shield in Denver.
Between 2005 and 2006 he was a senior IT audit consultant for Genworth Financial Inc., a $9 billion insurance carrier in the long-term care, mortgage, retirement and wealth management business. He previously worked at the large auditing firm KPMG.
He got an accounting degree from Towson University in Baltimore and graduated magna cum laude from Johns Hopkins University with a master of science in engineering and IT.
He enjoys snow skiing, wakeboarding and motorcycles, and lived most recently in Vail, Colo.