Objective

To determine if the Department of Health overpaid health care providers’ Medicaid claims for therapy services and prescription drugs that are covered by Medicare. The audit covered the period January 1, 2012 to December 31, 2016 for prescription drugs and January 1, 2012 to December 31, 2017 for therapy services.

About the Program

Many of the State’s Medicaid recipients are also enrolled in Medicare. Such individuals are referred to as “dual-eligibles.” The Medicare program covers physical, occupational, and speech therapy services, as well as prescription drugs. When these services are rendered to dual-eligible recipients, health care providers are required to bill Medicare, which is generally the primary payer, before billing Medicaid.

Key Findings

The audit identified $20.1 million in Medicaid payments for services provided to dual-eligible recipients that, according to the automated claim information, should have been paid by Medicare, as follows:

• $18.6 million was paid for physical, occupational, and speech therapy services provided by licensed therapists. Payments were made on behalf of 6,712 dual-eligible recipients, and 20 providers accounted for more than $13 million of the payments. Providers we spoke to indicated they were unaware the services were covered by Medicare and, therefore, did not bill Medicare.
• $1.5 million was paid for prescription drugs. While the Medicaid recipients had Medicare coverage for the services, over half of the claims were for individuals who had their Medicare coverage added retroactively, after the claims were paid by Medicaid.

Key Recommendations

• Review the $20.1 million in Medicaid payments for therapy services and prescription drugs and recover overpayments, as warranted. Ensure prompt attention is paid to the providers who received the largest amounts of the payments.
• Formally remind providers of the appropriate use of billing codes that indicate a service is not covered by Medicare, and their obligation to bill Medicare before Medicaid for services rendered to dual-eligible recipients.
• Implement claims processing controls that prevent Medicaid overpayments for therapy services and prescription drugs for dual-eligible recipients.