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MADISON, Wis. — Nurse Debra Zuhse-Green was stunned to learn that the state of Wisconsin wanted her to repay $57,000 she had received for providing home care to children with significant medical needs.

A 2013 audit concluded that Zuhse-Green should repay the state for six months of home care for the children. The audit found she had not submitted claims for reimbursement to the family's employer-based health plans — even though, Zuhse-Green said, "it had previously been established that the employer-based health plans would not cover the private duty nursing services."

Zuhse-Green said the problem was caused by her failure to check a specific box in the state's electronic claim system — which she described as a "glitch in their system" — that led to the claims not being filed.


The nonprofit news outlet Wisconsin Center for Investigative Journalism provided this article to The Associated Press through a collaboration with Institute for Nonprofit News.


Although the effort to claw back the money was later overturned, Zuhse-Green said she suffered the emotional stress of contemplating selling her home and declaring bankruptcy.

"(The state) is putting a hardship on us, expecting perfection," said Zuhse-Green, of Greenleaf. "It's very unfair."

Zuhse-Green said the experience made her question whether she should continue providing care under the Medicaid program, which covers about 1.2 million people in Wisconsin. The state's $9 billion-a-year program pays for health care services for the poor, blind, people with disabilities and certain elderly people. It is jointly funded by the state and federal governments.

During his eight years in office, Republican Gov. Scott Walker has touted Wisconsin's efforts to root out fraud, saying that as of 2017, the state had identified $150 million in Medicaid and FoodShare fraud and overpayments.

However, critics contend that the state has gone too far in some cases, seeking to take back huge sums of money from companies and individuals who provided health care services but had minor paperwork errors.

It is unclear whether the incoming Democratic administrations of Tony Evers, who defeated Walker in the November election, and Josh Kaul, who beat Republican Attorney General Brad Schimel, will continue the state's aggressive tactics.

Messages left with Evers' transition staff were not returned. Gillian Drummond, a spokeswoman for Kaul, said, "We're not going to be able to answer that question before taking office (Jan. 7)."

Darci Knapp, former president and now a board member of the Wisconsin Personal Services Association, said in recent years, the Wisconsin Department of Health Services' Office of Inspector General has aggressively sought to recover money for clerical errors instead of legitimate fraud from personal care providers who help bathe, feed and clothe roughly 16,000 disabled or elderly clients.

She cited the example of personal care agencies being docked entire days of billing for failing to properly document a 15-minute session.

"It's not fraud," Knapp said. "It's a simple mistake."

A recent court ruling raises questions about whether such mistakes will continue to be costly for Medicaid service providers.

The Wisconsin Court of Appeals in June rejected DHS's efforts to recoup money from the family planning organization Newcap Inc., saying the state did not require the clinic to keep the specific records that DHS was now requesting.

But the appeals panel also found that the agency could seek reimbursement if the provider fails to keep required records, even if "other records ... show the provider actually rendered the services in question."

In a similar case in 2016, Waukesha County Circuit Judge Kathryn Foster ordered the state DHS to stop demanding repayment from Medicaid-certified providers who provided services but who may have failed the department's "perfection rule" standard.

In some cases, the state has demanded repayment in excess of $100,000 from individual nurses, according to the lawsuit filed by Kathleen Papa. She is past president of Professional Homecare Providers, an association of independent nurses, and owner of KPI, Inc., a home health care services company in Oconomowoc.

The lawsuit included affidavits from seven providers and two parents describing the state's efforts to take back tens of thousands of dollars even though the billed services were provided.

Papa described the agency's tactics as "bullying."

DHS spokeswoman Jennifer Miller countered that, "There have never been any reports ... that any of our auditors have behaved unprofessionally or have bullied anyone."

Miller added that the audits are aimed at making sure taxpayer funds are spent on quality care. She said providers agree to abide by all rules and record keeping requirements when they sign up to provide Medicaid services.

Whether the appeals court ruling in the Newcap case will affect cases such as Papa's is the "$64,000 question," said Diane Welsh, a Madison attorney who represents Papa and other Medicaid providers challenging these enforcement actions.

Papa recounted one case, confirmed by Welsh, of a care provider who was facing having to repay thousands of dollars for failing to note a doctor's recommendation for a client to take an over-the-counter vitamin.

"The state's position is not only can they recoup for the five minutes it possibly took the nurse to get the vitamin D out of the bottle and hand it to the recipient to take it with water, they're allowed to recoup the entire day because one error was made," Papa said. "And if that vitamin D was given every day for the entire year, their position is they can take back every second of every day for the entire year."

The state has appealed the decision in the Papa case, arguing it interferes with its obligations to recover "improper" payments and that Papa lacks legal standing to bring the lawsuit.

The powerful Wisconsin Manufacturers and Commerce business group, in partnership with the Wisconsin Personal Services Association, has weighed in with a friend of the court brief, arguing that DHS's strategy can "push a business or family entrepreneur into bankruptcy."

A decision on that case is pending.

Susan Haidlinger, who has three children in need of daily care, said three nurses quit because of concerns over the DHS audits. Finding replacements was "a nightmare," she said.

Zuhse-Green was one of the nurses who stayed. She did a "wonderful" job, Haidlinger said.

Knapp said she believes that the state's recovery efforts should be limited "to instances where care was not provided or when a provider submits an inappropriate claim."

In July 2017, the state DHS' anti-fraud push suffered another blow. The department dropped its three-year, $16 million contract aimed at reducing costs and detecting fraud in personal care claims. According to the agency, the state had paid Liberty Healthcare Corp. $3.8 million but decided to end the contract early because spending on personal care services already was on the decline — to about $255 million in 2017.

In addition, the agency said new anti-fraud measures, including electronic visit verifications, accomplish the goal less expensively. It is unclear, however, how much value Wisconsin got out its $3.8 million investment in fraud detection.

"The contract ended before any information could be used to determine outcomes for the program," DHS said in a statement.

A statement from Liberty Healthcare said the decision to end the contract was "mutually agreed to."

As for what work was done for $3.8 million, "Liberty defers to the state to provide information about work done under the contract that is beyond the DHS statement," the company said. "Liberty was compensated according to terms of the contract."

Papa noted the irony of DHS trying to take back the earnings of health care workers who have provided the services they billed for while allowing a company to walk away with millions of dollars and little to show for it.

"We're trying to help the state. We're trying to help the governor with preventing fraud, waste and abuse," Papa said. "But we're just not getting any cooperation. And Liberty? Over $3 million of nothing."

Walker's effort to root out waste and fraud included establishing and expanding the DHS' inspector general's office, which audits programs and investigates potential fraud in Medicaid and other programs administered by DHS.

Since 2012, the inspector general's office has referred over 160 Medicaid providers to the state Department of Justice for possible prosecution, according to a 2017 report, the most recent available. The DOJ's Medicaid Fraud Control and Elder Abuse Unit has recovered $32 in fraud or overpayments for every $1 expended, according a federal assessment of the office.

Common methods of fraud include submitting falsified medical records or claims for services or goods not provided.

For example, in 2011, the state prosecuted providers who submitted claims for orthotic devices, including neck, back and leg-and-ankle braces that were never received by patients. The providers were sentenced from two years of probation to six years in prison and ordered to pay $1.5 million in restitution.

Like some in-home care providers, family planning clinics including Planned Parenthood say they were unfairly targeted by Walker's anti-fraud effort. They believe it stemmed from political opposition to some of the services they provide without government funding, including abortion.

The state's efforts to collect from one of Wisconsin's family planning clinics for alleged fraud, however, was stymied. In a decision issued in May 2017, an Oconto County judge halted the effort to recoup $185,000 from Newcap, which provides family planning services. The OIG alleged Newcap, which operates in northeastern Wisconsin, had failed to document that prescriptions billed to Medicaid had been used by patients.

Oconto County Judge Jay Conley ruled that Newcap already had proven in an earlier hearing that the billing was valid.

The state Court of Appeals upheld that decision in mid-June, finding that DHS' attempts to recoup the money in that case were improper. But the panel also found that the agency does have the right to take back payments for lack of proper documentation — even if the services were rendered.

Lawmakers are not giving up. The 2017-19 state budget includes a provision requiring the state to audit all family planning organizations going back four years, an effort that has already begun. Welsh said she hopes the new administration will refocus its efforts on "real" Medicaid fraud.

"We think fraud should be investigated — not imperfect documentation," Welsh said. "Hopefully that will change."

The nonprofit news outlet Wisconsin Center for Investigative Journalism provided this article to The Associated Press through a collaboration with Institute for Nonprofit News.