OIG: Mass. Agency Used Incorrect Medicaid Claim Adjustments
By - The Massachusetts Executive Office of Health and Human Services, Office of Medicaid overpaid approximately $106 million from October 2008 through December 2010, according to the Office of the Inspector General (OIG). The state agency used incorrect Federal medical assistance percentages (FMAPs) because it processed adjusted claims as new expenditures for both public and private providers.
According to the report, all states administer their Medicaid program in accordance with a Centers for Medicare & Medicaid Services (CMS)-approved state plan. Each state has lots of flexibility in designing and operating its Medicaid program. However, it must comply with applicable Federal requirements.
The Massachusetts agency reportedly used incorrect FMAPs when processing claim adjustments in the accounting statement it must submit each quarter. The statement in question shows the disposition of Medicaid funds for the quarter being reported and the previous fiscal years, as well as the recoupment made or refunds received and income earned on Medicaid funds.
Specifically, OIG reviewed 5,535,856 claims and found that the state agency processed 3,142,584 claims using the correct FMAPs. This resulted in the Massachusetts organization receiving $105,550,817 (Federal share) more than it was entitled to.
OIG recommended that the Massachusetts agency refund the money to the government and ensure that it processes future adjustments in accordance with Federal requirements. However, when the state organization implemented “OIG’s interpretation of the claiming rules,” it found that it was due approximately $108 million in Federal reimbursement from CMS. Once it receives confirmation from CMS, the Massachusetts agency said that it would be consistent with OIG’s recommendation and realign its payment systems going forward.
According to OIG, a preliminary review of the claims at the request of CMS showed that instead of including all claim adjustments, the state agency only used the two most recent claim adjustments when it calculated the Federal share for private provider claims. This created calculation errors for any claim adjusted more than one time.
Additionally, OIG found that many of the adjustments made might not have been allowable. This is because the agency’s claim data included numerous claim adjustments that were not made within the two-year timely filing period and were not all caused by rate adjustments.
“Our recommendations are based on an interpretation of the claiming rules that is supported by Federal requirements,” the report said. “The State agency’s assertion that it implemented OIG’s interpretation of the claiming rules when it calculated the $108 million is in error. Furthermore, the State agency’s offer to realign its payment systems in the future does not address the approximately $106 million that it received inappropriately because of its use of improper FMAPs in its calculations.”
OIG added that it still recommends that the Massachusetts organization refund the $106 million, and that it plans to work with CMS regarding the state agency’s calculation of the $108 million.
