Will State Force Family Planning Clinics To Close?

Two family planning clinics serving low-income women say their operations will be at serious financial risk if state auditors stand firm on claims that they overbilled Medicaid by $3.5 million, largely for birth control drugs and devices.

Beth Hartung, president of the Wisconsin Family Planning and Reproductive Health Association, said the auditors’ stance would also force other family planning providers in the same Medicaid program to claim a drastically lower reimbursement rate for birth control — forgoing a chunk of money that subsidizes other reproductive health care services they provide to low-income people.

“My hunch is that if any one of us were audited it would come out the same way. We’re all operating the same way,” Hartung said. “It would mean, quite frankly, that we would all close.”

The largest such provider in the state is Planned Parenthood of Wisconsin. Public policy director Nicole Safar called the audits “clinic-closing” and said she was concerned the clinics were being targeted for political reasons.

Department of Health Services Inspector General Alan White defended his auditors’ choice of targets and their findings. The drug billing program at issue is about $110 million a year of the $7 billion Medicaid budget.

“This administration, this agency has put a great deal of effort into improving program integrity, and (auditors) take it very seriously,” White said. “And protecting the taxpayers of Wisconsin is their predominant responsibility.”

In preliminary findings issued to the nonprofits in August, Office of Inspector General auditors wrote that Family Planning Health Services Inc. overbilled Medicaid by $2.3 million, and NEWCAP Inc. by $1.2 million, from 2010 to 2011.

Wausau-based FPHS serves about 6,000 people a year in nine counties. Oconto-based NEWCAP Inc.’s Community Health Services division last year served about 3,500 people in six counties. Neither organization provides abortions. Both operate in areas officially designated to have shortages of health care professionals.

FPHS and NEWCAP have responded and are waiting to hear back from the OIG. If the agency sends a notice of intent to recover money, the groups can appeal.

The auditors are challenging a reimbursement price for oral contraception that providers say the state itself set and is what their peers use.

The state is also claiming money on the grounds that the providers entered claims incorrectly. It claims the providers did not note the invoice price for medications. But providers say the state’s own computerized claim entry system does not include a way to enter the cost.

The claims concern the clinics’ use of Medicaid’s 340B drug pricing program, in which pharmaceutical companies are required to provide discounted drugs to safety net providers.

For family planning providers, the federal government reimburses 90 percent of the cost of drugs, while the state pays 10 percent.

That breakdown also means that the state stands to recoup relatively little. But White said that was not the point; his office has investigated cases in which no state money is involved.

“We have to protect both the state taxpayer and the federal taxpayer,” he said.

Safar said Planned Parenthood bills the same way that NEWCAP and FPHS are charged with doing — but for many more clients, and therefore much more money. Planned Parenthood told the department how it was billing in a 2011 survey but has not been audited.

“An audit isn’t the way to change how we’re billing,” Safar said. “This is a very under-the-radar way to block access to birth control.”

White was asked whether audits of specific groups were appropriate if the department knew the billing practices used by NEWCAP and FPHS were widespread among family planning clinics — or whether it was instead a signal that the health department should clarify its policies.

“That wouldn’t be within the scope of what this office does,” White said.

Lawmakers worry it’s politics

Two Democratic lawmakers, Rep. Chris Taylor of Madison and Sen. Dave Hansen of Green Bay, wrote the OIG on Oct. 27 saying “there appears to be no legal basis” for the claims.

They asked the office to produce a list of open audits to prove it is not disproportionately targeting providers serving or staffed by women.

White would not answer how NEWCAP and FPHS specifically were chosen for audits but denied that it was political. There were no complaints of fraud against NEWCAP or FPHS, or claims that they did not provide the birth control.

DHS provided data showing that of the office’s 3,950 open audits, only these two involved family planning clinics’ use of the 340B drug pricing program. Thirty family planning audits were under way — less than 1 percent of the total, the department argued, and most were federally required.

“Under no circumstances would this office be auditing a disproportionate share of providers targeting women,” White said.

Taylor, a former public policy director of Planned Parenthood of Wisconsin, said she is suspicious because Gov. Scott Walker’s administration and the Republican-controlled Legislature have been “hostile to birth control.”

Five Planned Parenthood clinics shut down after the Legislature cut funding to the organization, a move widely praised by pro-life advocates.

The Walker administration also effectively disbanded the state’s Family Planning Council, which under the Doyle administration was a place for agency officials and providers to share information.

With the Nov. 4 election days away, Planned Parenthood sent voters a two-page glossy mailer emblazoned with a close-up of a pack of oral contraception under the title, “SCOTT WALKER: EXTREME ON BIRTH CONTROL AND ABORTION.”

Asked to comment on the harsh characterizations of Walker, Laurel Patrick, the governor’s press secretary, replied:

“On all the substantive points, DHS has provided information on this issue related to conducting audits as part of its charge to protect Wisconsin taxpayers, who pay both federal and state taxes, from misuse of or errors in practice for public assistance programs such as Medicaid, FoodShare, FamilyCare and other programs.”

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