Purpose

To determine if Medicaid overpaid Ambulatory Patient Groups claims because of deficiencies in the claims processing and payment system. The audit covered the period December 1, 2008 through March 31, 2013.

Background

The Medicaid program reimburses outpatient services through the use of the Ambulatory Patient Groups (APG) payment methodology. The APG system was adopted by the Department of Health (Department) in an effort to more accurately pay providers for services rendered. Accordingly, APG claims are reimbursed based on patient condition and complexity of service. The Department phased in the APG methodology beginning with hospital outpatient departments and ambulatory surgery centers on December 1, 2008. The APG methodology was then implemented in diagnostic and treatment centers and freestanding ambulatory surgery centers on September 1, 2009.

Key Findings

• Medicaid made $1,083,836 in actual and potential APG claim overpayments for unit-based procedures, including rehabilitation services. Of this amount, payments totaling $614,260 were made for the same medical procedure billed multiple times on the same date of service, and $469,576 was paid for rehabilitation services beyond the allowed limits.
• Medicaid made questionable APG claim payments totaling $10,195,755 for dental clinic claims that were processed without sufficient scrutiny of the propriety or frequency of the services billed.
• We concluded the Department relies too heavily on providers to comply with APG billing rules and regulations instead of implementing controls to enforce APG policy and payment rules. In addition, the Department did not effectively communicate certain changes in APG policies and procedures to the provider community.

Key Recommendations

• Strengthen controls over APG claim processing to address the weaknesses we identified. Where feasible, apply professional service limits to APG claims. Formally communicate any corresponding modifications to providers.
• Review inappropriate APG payments and make recoveries, as appropriate.

Other Related Audits/Reports of Interest

Department of Health: Overpayments of Ambulatory Patient Group Claims (2011-S-43)
Department of Health: Medicaid Claims Processing Activity April 1, 2012 Through September 30, 2012 (2012-S-24)
Department of Health: Medicaid Payments for Excessive Dental Services (2009-S-46)