Purpose

To determine the extent of implementation of the two recommendations made in our audit report, Overpayments for Services Also Covered by Medicare Part B (Report 2012-S-27).

Background

Many of the State’s Medicaid recipients are also enrolled in Medicare Part B, which provides supplementary medical insurance for a broad range of outpatient medical services, physicians’ fees, and medical supplies. For individuals enrolled in both Medicaid and Medicare, Medicare is generally the primary payer while Medicaid is a secondary payer. As a secondary payer, Medicaid pays the balance not covered by Medicare which would otherwise be the financial obligation of the patient (such as deductibles and coinsurance).

Federally qualified health centers (FQHCs) receive enhanced reimbursements from Medicaid and Medicare for the Part B services they provide. FQHCs are “safety net” providers, such as community health centers and public housing centers, that provide medical services to underserved areas or populations.

Our initial audit report, which was issued on July 9, 2013, identified $7.3 million in Medicaid overpayments. Most of the overpayments occurred because providers overstated the amounts of Medicare coinsurance for Part B services. We also determined Medicaid overpaid $238,842 because the Department incorrectly designated certain providers as FQHCs. We recommended that the Department review and recover the Medicaid overpayments.

Key Finding

Department officials have made minimal progress in recovering the $7.3 million in Medicaid overpayments we identified. At the time of our follow-up, $3,125 was recovered, but more than $1 million in potential recoveries were likely lost due to the inaction on overpayments for claims that are now more than six years old. Our initial report’s two audit recommendations have been partially implemented.

Key Recommendation

Officials are given 30 days after the issuance of the follow-up report to provide information on any actions that are planned to address the unresolved issues discussed in this report.

Other Related Audits/Reports of Interest

Department of Health: Overpayments for Services Also Covered by Medicare Part B (2012-S-27)
Department of Health: Overpayments for Services Also Covered by Medicare Part B (2010-S-50)