The U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) recently decided to check whether the states complied with the federal and state requirements that prohibited Medicaid payments. According to the report filed by the OIG, Missouri was found to be noncompliant with up to $2.7 million spent toward inappropriate claims in three years. The Missouri Department of Social Services did not comply with the regulations regarding Medicaid payments for treating preventable conditions. It further stated that the department did not follow Centers for Medicare & Medicaid Services (CMS) procedure to review claims with diagnostic codes identified as conditions caused by medical accidents or errors in a health care setting.
Effective July 2011, federal regulations prohibited Medicaid payments for services related to provider-preventable conditions (PPCs). However, in order to give time to the states for implementing new payment policies, the CMS delayed enforcement of these regulations until July 2012.
A PPC may be a health care-acquired condition (HCAC), such as falls and trauma, surgical site infections and foreign objects retained post-surgery, or other provider-preventable conditions (OPPC) like an incorrect surgical procedure or an invasive procedure performed either on the wrong body part or on the wrong patient. According to the established guidelines, the states should execute non-payment policies for all these conditions.
OIG identified $1.7 million of federal share under inpatient hospital claims
For their analysis, the OIG examined the state’s Medicaid paid claim data for inpatient hospital expenditures from July 2012 to September 2015. According to the OIG, the state agency lacked proper policies and procedures to bring attention to insurance claims that should have been subject to potential payment reductions. The OIG also accused the state agency for not integrating relevant information into its system. The state agency was found to have incorrectly excluded diagnosis codes given on the list of Medicare hospital-acquired conditions and instead included the ones that were not supposed to be subjected to payment reduction.
The OIG identified inpatient hospital claims totaling $2.7 million that were spent treating PPCs. Out of this, $1.7 million constitutes federal money. The OIG has further asked the state to work with CMS to identify legitimate claims as well as determine the portion of the $1.7 million that should not have been permitted and return them to the federal government. Additionally, the OIG has also made procedural recommendations to the agency to develop sufficient strategies in order to ensure that correct diagnosis codes are in place to identify PPCs.
Post the publication of the report, the state agency has declared to have reviewed all its inpatient hospital claims to determine if payments should be adjusted for claims containing PPCs and has identified a recoupment of almost $220,000 for claims with PPCs. Though the OIG has commended the state agency for taking prompt action, it has not yet reviewed the new procedures to identify their effectiveness.
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