Purpose

To determine if Medicaid reimbursement rates for group therapy services provided by Federally Qualified Health Centers were correctly applied. The audit covered the period June 1, 2008 through May 31, 2014.

Background

The Department of Health (Department) administers the State’s Medicaid program in accordance with a federally approved Medicaid State Plan. The Department’s many responsibilities include establishing Medicaid policies and procedures, certifying providers that participate in the program, and setting Medicaid reimbursement rates. With approval from the federal Centers for Medicare and Medicaid Services, the Department amended the Medicaid State Plan in 2008 to allow Federally Qualified Health Centers (FQHCs) to provide group therapy services, including group therapy provided by clinical social workers, to Medicaid recipients. FQHCs are organizations such as community health centers and public housing centers that provide primary and preventive care to underserved populations. There are 72 FQHCs in New York. Twenty-three provided group therapy services to Medicaid recipients during the audit period.

Key Findings

• Medicaid overpaid four FQHCs $7.7 million because the FQHCs billed incorrect reimbursement rates on their claims for group therapy services. The FQHCs billed an approximate rate of $200 per person for group therapy, as opposed to the required $35.16 rate per person.
• To illustrate, a FQHC billed Medicaid for a group therapy session for eight recipients. The provider did not bill the appropriate FQHC payment rate of $35.16 for group therapy, but rather billed a rate of $203.45. As a result, Medicaid reimbursed the provider $1,627.60 for the onehour session ($203.45 x 8 recipients). If the provider billed the appropriate FQHC rate, Medicaid would have reimbursed the provider only $281.28 ($35.16 x 8 recipients) for the session. Consequently, Medicaid overpaid the provider $1,346.32 in this instance.

Key Recommendations

• Review and recover Medicaid overpayments totaling $7.7 million.
• Clarify to the FQHCs that were overpaid how to properly bill Medicaid for group therapy services.
• Ensure all FQHCs bill Medicaid the correct reimbursement rate for group therapy services.

Other Related Audits/Reports of Interest

Department of Health: Overpayments for Services Also Covered by Medicare Part B (2012-S-27)
Department of Health: Medicaid Claims Processing Activity October 1, 2011 Through March 31, 2012 (2011-S-39)
Department of Health: Medicaid Claims Processing Activity October 1, 2008 Through March 31, 2009 (2008-S-155)