Department of Social Services
Department of Health

Medicaid Payments to Clinics Using Products of Ambulatory Surgery and Ambulatory Care Methodology

Under the Medicaid program, hospital-based clinics may be reimbursed for providing patients with preventive, diagnostic, rehabilitative or other types of services termed ambulatory care and ambulatory surgery. The reimbursements, which are processed by the Department of Social Services, should be based on rates established by the Department of Health. We examined these reimbursements over a 29-month period and found that clinics were overpaid as much as $4.5 million because services were billed at incorrect rates, the same service was billed more than once, and the prior approval of the Department of Health was not documented for certain types of services. The overpayments were made because controls were not established by the Department of Social Services to detect these billing errors. In a prior report, we recommended that some of these controls be established, but our recommendations were not fully implemented. We again recommended that the appropriate controls be established. We also recommended that the overpayments be recovered. 94-S-84