Objective

To determine the extent of implementation of the two recommendations made in our initial audit report, Inappropriate Payments Related to Procedure Modifiers (Report 2016-S-63).

About the Program

The Department of Health (Department) administers the State’s Medicaid program, which provides a wide range of health care services to individuals who are economically disadvantaged and/or have special health care needs. Per State Medicaid policies, payment for a surgical procedure includes all services normally performed during the preoperative, intraoperative, and postoperative periods, commonly known as the global surgery period. All routine services related to the surgery, such as evaluation and management (E/M) services, are included in Medicaid’s payment for the procedure. E/M services unrelated to the original procedure that occur during the global surgery period may be reported, and reimbursed, by adding the appropriate modifier code to the E/M service.

We issued our initial audit report on April 17, 2018. The audit objective was to determine whether Medicaid made inappropriate payments to providers that failed to use modifier codes properly. The audit covered the period January 1, 2012 through March 31, 2017. Our initial audit found that the Department incorrectly implemented claims processing system controls to prevent inappropriate payments for E/M services during the global surgery period, which resulted in Medicaid overpayments totaling about $2.6 million. The Department corrected the system controls during our initial audit fieldwork. We recommended the Department review and recover the inappropriate payments we identified and advise providers to report accurate claim information when billing Medicaid for E/M services during global surgery periods.

Key Finding

Department officials made some progress in addressing the problems we identified in the initial audit report. However, no action has been taken to review and recover the inappropriate payments we identified. Of the initial report’s two audit recommendations, one was implemented and one was not 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.