Colo. Agency Claims $4.1M Unallowable Medicaid Payments
By - A Colorado state agency claimed just over $4 million in unallowable Medicaid nursing facility supplemental payments for state fiscal years (FY) 2010 and 2011, according to a recent Office of the Inspector General (OIG) audit.
Specifically, the Colorado Department of Health Care Policy & Financing claimed $4.1 million, $2.5 million of which was considered Federal share. According to OIG, an earlier review found that the state agency did not always make Medicaid inpatient hospital supplemental payments in accordance with Federal and state requirements. As Colorado received more than $128 million in Federal reimbursement for its Medicaid nursing facility supplemental payment program, OIG wanted to determine if the supplemental payments made by the agency followed all requirements.
OIG also found that the department incorrectly included Colorado government-owned or -operated nursing facilities and non-Colorado government-owned or -operated nursing facilities in its UPL calculations. This was done for privately owned and operated nursing facilities.
“The State agency was not able to able to identify the exact cause of the overpayment, nor was the overpayment identified when it was made,” OIG explained in its report. “We believe that the State agency could correct these types of deficiencies by adjusting its accounting system to capture greater facility-level payment detail. In addition, the State agency did not follow its State plan methodology so that [certified public expenditure] supplemental payments did not exceed the [upper payment limits].”
OIG added that the Colorado organization did not accurately identify nursing facilities by category. Because of that, the state agency did not correctly calculate the privately owned and operated nursing facility UPLs.
The Colorado agency was recommended to do several tasks, including refunding the $2.5 million of Federal share. Additionally, OIG said that the organization needed to improve policies its and procedures to ensure that its accounting system captures sufficient facility-level detail. That way, actual payments do not exceed prospective payments in the future.
It was also recommended that the state agency “strengthen internal controls to ensure that it follows its State plan methodology so that CPE supplemental payments made to nursing facilities are equal to or below the applicable UPLs in accordance with Federal requirements.”
Lastly, OIG said that the Colorado organization needed to improve its internal controls so it calculates UPLs for the nursing facilities’ three categories in accordance with all requirements.
The Colorado Department of Health Care Policy & Financing agreed to all recommendations put forth, and said specifically that it will “add codes to its accounting system for each supplemental payment type to capture greater facility-level payment detail.” Moreover, the agency said that it would improve internal processes so that everything is calculated correctly in the future. The coding changes will be implemented by January 2015, along with the internal controls for calculating UPLs. The money will be refunded to the federal government by July 2015, the agency said.
