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NYS Comptroller

THOMAS P. DiNAPOLI

News

From the Office of the New York State Comptroller

Thomas P. DiNapoli

December 8, 2016, Contact: Press Office (518) 474-4015

DiNapoli: Billing and Reimbursement Flaws Allowed $16.6 Million in Inappropriate Payments to Home Health Care Providers

The state Department of Health (DOH) erroneously made $16.6 million in Medicaid payments to 95 home health providers over a 3 1/2-year period, largely because the agency mistakenly paid for more days of care than what was provided, according to an audit released today by New York State Comptroller Thomas P. DiNapoli.

“Home health care providers fill a great need by allowing patients to stay in their homes and avoid costly placement in hospitals or rehabilitation centers,” DiNapoli said. “However, my auditors found numerous instances where the state Department of Health’s eMedNY billing system paid providers for weeks of service, when only days of care had been given.”

In 2012, as part of its Medicaid redesign program, DOH implemented an Episodic Payment System (EPS) to reimburse certified home health agencies (CHHA) for health care services provided to Medicaid recipients in their homes. CHHAs provide various services including long-term nursing services, home health aide services, physical therapy, social work and nutrition services.

The payment system is based on 60-day episodes of care. CHHAs can be paid for a full episode or may receive pro-rated payments based on the number of days of care on the claim.

For the period May 1, 2012 through Dec. 31, 2015, DiNapoli’s auditors identified about $16.6 million in improper Medicaid payments to 95 CHHAs. About 93 percent ($15.4 million) of the overpayments went to 20 CHHAs.

Auditors found $8.2 million in overpayments to CHHAs for recipients who were transferred into Managed Long Term Care (MLTC) during a 60-day episode of care. The CHHAs should have received pro-rated payments for the partial episodes of care. For example, one CHHA received a full payment of $11,607 for a recipient who received home health services for only four days, leading to an overpayment of $10,833.

Approximately $7.1 million in overpayments were made to CHHAs that improperly billed multiple episodes for the same recipient within 60 days of the recipient’s original episode start date.

Another $1.3 million in overpayments went to CHHAs that improperly received full 60-day payments for recipients who subsequently obtained services from a different CHHA within an episode of care. For example, a CHHA was paid $10,979 (a full 60-day payment) for ten days of services. Five days later, the recipient then received services from a different CHHA, which received $4,202 for 56 days of services. The first CHHA should only have received a pro-rated payment amount of $1,830 for the 10 days.

DiNapoli’s auditors determined DOH has not established eMedNY system controls to prevent the improper payments they identified. The issues found by auditors were raised by DOH employees during the construction of the EPS. However, insufficient resources and the EPS billing configuration prevented the development of effective eMedNY system controls to prevent the overpayments, according to DOH officials.

DiNapoli recommended DOH:

  • Review the $16.6 million in improper payments made to CHHAs and recover overpayments, as appropriate, and ensure prompt attention is paid to those providers that received the largest dollar amounts of overpayments; and
  • Develop and implement mechanisms to identify and recover overpayments when CHHAs do not bill according to DOH guidelines.

DOH officials concurred with the audit recommendations and indicated actions will be taken to address them. Their full response is included in the complete audit.

Read the report, or go to: http://www.osc.state.ny.us/audits/allaudits/093017/16s4.pdf

For access to state and local government spending and more than 50,000 state contracts, visit www.openbooknewyork.com. The easy-to-use website was created by DiNapoli to promote openness in government and provide taxpayers with better access to the financial workings of government.

Albany Phone: (518) 474-4015 Fax: (518) 473-8940
NYC Phone: (212) 383-1388 Fax: (212) 681-7677
Internet: www.osc.state.ny.us
E-Mail: press@osc.state.ny.us