Policy & Regulation News

OIG: Texas Agency Not Always in Accordance for Medicaid Payments

By Ryan Mcaskill

- Last month, the Office of Inspector General (OIG) released a review of physician supplemental payments that were made to the University of North Texas. It was discovered that the organization received $1,229,407 ($746,461 federal share) in unallowable supplemental payments.

The Texas State plan amendment 04-010 (SPA) provides quarterly physician supplemental payments for services provided by physicians who are employed by group practices owned or operated by State academic health systems. The University of North Texas Health Science Center (UNT) is one of three state academic health systems, providing services to more than 35 locations in Tarrant County. Between May 1, 2004, and September 30, 2007, the time frame the audit examined, the agency made $8,332,388 in supplemental payments to UNT.

To create the SPA, the state agency contracted with Public Consulting Group (PCG). The goal was to determine which physician group practices qualify for supplemental payments and calculate them.

The OIG review was conducted to ensure that these calculations and subsequent payments made to UNT were in accordance with federal and state requirements. Upon investigation, it was determined that the agency did not always calculate payments in accordance with these requirements.

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  • Specifically, the payment calculations overstated Medicare equivalent fees for claims that included diagnostic tests and Current Procedural Terminology (CPT) code payment modifiers; Medicaid service were performed by ineligible providers; and Medicaid services that did not have Medicare equivalent fees.

    The overpayments are attributed to a lack of formal written policies and procedures. This led to an incomplete methodology used to calculate supplemental payments which was inconsistent with the terms of the SPA and did not comply with Federal and State requirements.

    “PCG provided 6 months of hands-on training to a State agency rate analyst before the State agency assumed responsibility for calculating the supplemental payments,” the report states. “The official said that the rate analyst, who initially calculated the supplemental payments for the State agency, created a one-page document based on the training that PCG provided. That document contained only limited procedures for the calculation.”

    The OIG recommended the state agency refund the federal share and create more formalized written policies and procedures. This ensures a reduction in potential errors in calculating only eligible services performed by eligible physicians.

    The agency did respond and disagreed with some of the findings. Specifically stating that the calculation method used was approved by the Centers for Medicare & Medicaid Services (CMS). However, the system was not in accordance with the SPA that was in effect during the time of the audit.  The agency has created plans to improve operations and has already enacted some of them. They also announced an ongoing partnership with CMS to ensure that all future calculations meet requirements.

    Despite the comments from the agency, OIG did not change its recommendations for addressing the issues and improving operations.