Department of Health

Controls Over Medicaid Fees and Rates

Medicaid payments to physicians, providers of durable medical equipment and certain other medical providers are paid on the basis of approved fee schedules. Payments to hospitals, clinics and nursing homes are paid on the basis of these entities’ operating expenses, as approved by the Department of Health (rates). Fees and rates may change during the year, and when they do change, the automated Medicaid payment files must be accurately updated by the Department of Health. We examined the controls over the processes used by the Department to update these files and found that fee and rates changes were not always adequately documented. We concluded that there was a significant risk Medicaid claims could be overpaid or underpaid because incorrect fees and rates were used in calculating the payments. We recommended that certain controls be established or improved by the Department of Health.

For a complete copy of Report 2003-S-4 click here.
For a copy of the 90-day response click here.