Objective

To determine the extent of implementation of the three recommendations made in our initial audit report, Medicaid Overpayments for Inpatient Care Involving Mechanical Ventilation Services (Report 2018-S-45).

About the Program

Mechanical ventilation is the use of a device to inflate and deflate a patient’s lungs. Mechanical ventilation provides the force needed to deliver air to the lungs in a patient whose ability to breathe is diminished or lost. Hospitals use International Classification of Diseases (ICD) procedure codes on their claims to report mechanical ventilation services. When hospitals use a specific ICD procedure code to report a patient received 96 consecutive hours or more (i.e., four days or more) of mechanical ventilation, it causes higher Medicaid payments.

We issued our initial report on May 16, 2019. The audit objective was to determine whether Medicaid overpayments were made to hospitals for mechanical ventilation services reported on APR-DRG (All Patient Refined Diagnosis Related Groups) inpatient claims. The audit covered the period from January 1, 2014 through December 31, 2018. We identified $975,795 in overpayments on 32 inpatient claims that reported 96 consecutive hours or more of mechanical ventilation services. We found claims processing control weaknesses that prevented the claims processing system from identifying claims where 96 consecutive hours or more of mechanical ventilation services was not possible. We made three recommendations to the Department of Health (Department) to review and recover the overpayments we identified; remind hospitals to use the proper ICD procedure code that represents the duration of time the patient received mechanical ventilation services; and establish payment controls.

Key Finding

Department officials made some progress in addressing the problems we identified in the initial audit report; however, additional action is needed. In particular, the Office of the Medicaid Inspector General, which recovers Medicaid payments on behalf of the Department, had not taken action to review the Medicaid overpayments and make any recoveries. Of the initial report’s three audit recommendations, two were 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 the follow-up report.