State Auditor Questions Billing in Nebraska’s $434 Million Aged and Disabled Waiver Program

LINCOLN, Nebraska—Nebraska’s state auditor says his office’s recent examination of the state of Nebraska’s Aged and Disabled (AD) Waiver program has uncovered ongoing weaknesses in controls used to prevent improper billing by service providers.

Those problems are detailed in a 34-page report released by the office of Nebraska State Auditor Mike Foley. The AD Waiver program, administered by the Nebraska Department of Health and Human Services (DHHS) Division of Disability and Aging, provides in-home services to elderly and disabled Nebraskans and is funded by a mix of federal and state tax dollars.

Foley’s office said the program has grown from approximately $64 million a decade ago to $434 million today, a nearly sevenfold increase. In the past two years alone, the cost of the program has climbed by almost 65%. More than 8,600 individuals are now assisted by some 2,000 service providers. 

“A major challenge in controlling surging costs is eradicating fraudulent billing by unscrupulous providers who exploit the program’s current administrative weaknesses,” Foley said.

The work performed by Foley’s audit team identified multiple examples of highly questionable billing, including the following:

• Providers billing for more than 24 hours of services in a single day. A certain provider billed for 47 hours in only one day.
• Providers receiving payment while working elsewhere. Auditors identified 15 providers who were paid for supposedly performing DHHS services, but they were actually working elsewhere at the time. One provider was found to have clocked in to the AD Waiver program from her other place of employment instead of the participant’s home.
• Providers circumventing the electronic visit verification (EVV) system. DHHS uses an EVV system that requires providers to log in by smartphone when performing services. Though intended to help prevent excessive billing, the system’s controls were easily bypassed by providers who split consecutive hours across two different days.
• Providers increasing billable time beyond EVV-verified hours. Auditors found that providers could adjust their billable time after the EVV system had verified the hours worked. One agency increased its billable time by 434.5 hours in a single month. The same agency also billed for caregivers claiming to have worked more than 24 consecutive hours.
• Providers billing for more hours than participants were authorized to receive. In a test of 17 participants, providers billed for more than the number of service hours authorized. This included the provider mentioned previously, who billed for 47 hours in a single day.

Foley’s audit team also raised concerns regarding questionable hourly rates paid to various providers.

“The people receiving assistance through the AD Waiver program deserve our full support, and honest service providers are entitled to fair compensation,” Foley said. “At the same time, DHHS must be able to account for every dollar spent on this program. We cannot afford to continue paying for services that were never rendered or allowing unethical providers to line their pockets with ill-gotten taxpayer money.”