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Wis. Family Planning Providers Say State Audits Appear Politically Motivated, Place Clinics at Risk

Wis. Family Planning Providers Say State Audits Appear Politically Motivated, Place Clinics at Risk

November 26, 2014 — Safety-net family planning providers in Wisconsin and some state lawmakers say state audits alleging that two clinic operators overbilled Medicaid are politically motivated, the Wisconsin Center for Investigative Journalism/Green Bay Press Gazette reports.

Audit Details, Clinics' Response

In preliminary audit findings provided to the clinics in August, the state Department of Health Services' Office of Inspector General said the clinics overbilled the Medicaid 340B drug pricing program by $3.5 million, largely in claims for various contraceptives. Under the 340B program, pharmaceutical companies provide medications to safety-net providers at discounted prices. The federal government then reimburses the providers for 90% of the drug costs, while the state pays 10%.

Specifically, the audits said that Wausau-based Family Planning Health Services overbilled Medicaid by $2.3 million from 2010 to 2011, while Oconto-based NEWCAP overbilled the program by $1.2 million during the same time period. FPHS serves about 6,000 people annually in nine counties, while NEWCAP's Community Health Services division served about 3,500 people in six counties last year.

According to the WCIJ/Press Gazette, the audits challenged the reimbursement price for oral contraceptives. The clinics have noted that the price was set by the state itself and is used by other providers.

In addition, the state alleged that the providers entered some claims incorrectly and did not list proper medication invoice prices. However, the providers said they used the state's computerized claim entry system, which does not allow them to enter the prices.

Audits Put Clinics at Financial Risk

The clinics have said that if the state attempts to recoup the allegedly overbilled funds, they would be at serious financial risk and could have to close. The clinics have responded to the claims and are waiting for responses from the OIG. According to the WCIJ/Press Gazette, the clinics can appeal if they are sent notices of intent to recover the funds.

Because the family planning clinics are not fully reimbursed by Medicaid, the 340B program prevents them from losing money on services, explained Jennifer Waloway, NEWCAP's director of community health services. If the clinics were required to bill the way the audits suggest, their businesses would become unsustainable, she said, adding, "I don't understand how they can expect anybody to be sustainable in a business when all you can charge is [the] acquisition price [of the drug]. Nobody can run a business like that."

Beth Hartung, president of the Wisconsin Family Planning and Reproductive Health Association, said that if the state forces other family planning clinics that use the same Medicaid program to take the significantly lower reimbursements for contraceptives, "[i]t would mean, quite frankly, that we would all close."

Planned Parenthood of Wisconsin Public Policy Director Nicole Safar also called the audits potentially "clinic-closing," adding that she feels the providers were being targeted for political reasons. She said, "This is a very under-the-radar way to block access to birth control."

State Rep. Chris Taylor (D) and Sen. Dave Hansen (D) in a letter to the OIG last month wrote that "there appears to be no legal basis" for the audits' claims and asked the office to provide a list of all its open audits to demonstrate that it is not targeting women's health providers.

Taylor noted that Gov. Scott Walker's (R) administration and the Republican-controlled state Legislature have been "hostile to birth control," which makes her suspicious of the motives behind the audits. Walker effectively dissolved the state Family Planning Council, and five Planned Parenthood clinics in Wisconsin closed after lawmakers blocked funding to the organization.

OIG Responds

State DHS Inspector General Alan White said his office "has put a great deal of effort into improving program integrity, and (auditors) take it very seriously," adding that "protecting the taxpayers of Wisconsin is their predominant responsibility."

White would not say why the two clinics were chosen for the audits. However, DHS provided data showing that of the 3,950 open audits, 30 family planning audits are underway and only the audits for FPHS and NEWCAP involve the 340B program. White said, "Under no circumstances would this office be auditing a disproportionate share of providers targeting women" (Golden, Wisconsin Center for Investigative Journalism/Green Bay Press Gazette, 11/25).