Partnership Audit of Medicaid Payments for Oxygen Related Durable Medical Equipment and Supplies -

Hhs Office Of Inspector General, Office Of Audit Services (Oas)

Informations

• Publié par: Ebbe
• Nombre de lectures: 66
• Langue: English

Extrait

DEPARTMENTOF HEALTHAND HUMAN SERVICES
OFFICE OF AUDIT SERVICES
REGION V
233 NORTH MICHIGANAVENUE
OFFICE OF

CHICAGO, ILLINOIS 60601
INSPECTOR GENERAL

March 5, 2003
Report Number A-05-02-00063

Mr. Mike Robinson, Commissioner

Commonwealth of Kentucky

Cabinet for Health Services

Department for Medicaid Services

275 East Main Street

1
Frankfort, Kentucky 4062
Dear Mr. Robinson:

Enclosed are two copies of the U.S. Department of Health and Human Services (HHS),
Office of Inspector General, Office of Audit Services’ (OAS) report entitled “Audit of
Medicaid Payments for Oxygen Related Durable Medical Equipment and Supplies” for
the period January 1,1998 through December 3 1,2000. The report was prepared in
partnership with the Kentucky Auditor of Public Accounts. A copy of this report will be
forwarded to the action official noted below for his review and any action deemed
necessary.
Final determination as to actions taken on all matters reported will be made by the HHS
action official named below. We request that you respond to the HHS action official
within 30 days from the date of this letter. Your response should present any comments
or additional information that you believe may have a bearing on the final determination,
In accordance with the principles of the Freedom of Information Act (5 U.S.C. 552, as
amended by Public Law 104-23l), OIG, OAS reports issued to the Department’s grantees
and contractors are made available to members of the press and general public to the
extent information contained therein is not subject to exemptions in the Act which the
Department chooses to exercise. (See 45 CFR Part 5.)
To facilitate identification, please refer to Report Number A-05-02-00063 in all
correspondence relating to this report.
Sincerely,
Paul Swanson Edward B. Hatchett, Jr.
Regional Inspector General Auditor of Public Accounts
for Audit Services Commonwealth of Kentucky
Enclosures - as stated Direct Reply to HHS Action Official:
Associate Regional Administrator

Centers for Medicare and Medicaid Services, Region IV

Division of Medicaid and State Operations

Sam Nunn Atlanta Federal Center

61 Forsyth Street, SW, Suite 4T20

Atlanta, GA 30303
Department of Health and Human Services
OFFICE OF

INSPECTOR GENERAL

PARTNERSHIP AUDIT OF MEDICAID

PAYMENTS FOR OXYGEN

RELATED DURABLE MEDICAL

EQUIPMENT AND SUPPLIES

JANUARY 1,1998 THROUGH

DECEMBER 31,2000

KENTUCKY DEPARTMENT FOR

MEDICAID SERVICES

FRANKFORT, KENTUCKY

JANET REHNQUIST
Inspector General
7

MARCH 2003
A-05-02-00063 Office of Inspector General

http://oig.hhs.gov
The mission of the Office of Inspector General (OIG), as mandated by Public Law 95-452, as
amended, is to protect the integrity of the Department of Health and Human Services (HHS)
programs, as well as the health and welfare of beneficiaries served by those programs. This
statutory mission is carried out through a nationwide network of audits, investigations,and
inspections conducted by the following operating components:
Office of Audit Services
The OIG's Office of Audit Services (OAS) provides all auditing services for HHS, either by
conducting audits with its own audit resources or by overseeing audit work done by others.
Audits examine the performance of HHS programs and/or its grantees and contractors in
carrying out their respective responsibilities and are intended to provide independent
assessments of HHS programs and operations in order to reduce waste, abuse, and
mismanagement and to promote economy and efficiency throughout the department.
Office of Evaluation and Inspactions
The OIG's Office of Evaluation and Inspections (OEI) conducts short-term management and
program evaluations (called inspections) that focus on issues of concern to the department,
the Congress, and the public. The findings and recommendations contained in the
inspections reports generate rapid, accurate, and up-to-date information on the efficiency,
vulnerability, and effectiveness of departmental programs.
Office of Investigations
The OIG's Office of Investigations (01) conducts criminal, civil, and administrative
investigations of allegations of wrongdoing in HHS programs or to HHS beneficiaries and of
unjust enrichment by providers. The investigative efforts of 01 lead to criminal convictions,
administrative sanctions, or civil monetary penalties. The 01 also oversees state Medicaid
fraud control units, which investigate and prosecute fraud and patient abuse in the
program.
Office of Counsel to the Inspector General
~
The Office of Counsel to the Inspector General (OCIG) provides general legal services to
OIG, rendering advice and opinions on HHS programs and operations and providing all legal
support in OIG's internal operations. The OCIG imposes program exclusions and civil
monetary penalties on health care providers and litigates those actions within the department.
The OCIG also represents OIG in the global settlement of cases arising under the Civil False
Claims Act, develops and monitors corporate integrity agreements, develops model
compliance plans, renders advisory opinions on OIG sanctionsto the health care community,
and issues fraud alerts and other industry guidance. Notices

THIS REPORT IS AVAILABLE TO THE PUBLIC
at http://oig.hhs.gov
In accordance with the principles of the Freedom of InformationAct (5 U.S.C. 552,
as amended by Public Law 104231), Office of Inspector General, Office of Audit
Services reports are made available to members of the publicto the extent the
information is not subject to exemptions in the act. (See 45 CFR Part 5.)
OAS FINDINGS AND OPINIONS
The designation of financial or management practices as questionable or a
recommendationfor the disallowance of costs incurred or chimed, as well as other
conclusions and recommendations in this report, represent the findings and opinions
of the HHSIOIGIOAS. Authorized officials of the HHS divisions will make final
determination on these matters. EXECUTIVE SUMMARY
This report presents the results of a partnership audit of Medicaid payments for oxygen
related durable medical equipment and supplies in Kentucky. The audit was conducted
by the U.S. Department of Health and Human Services’ Office of Inspector General and
the Kentucky Auditor of Public Accounts.
OBJECTIVE
The objective of our review was to determine if the Kentucky Medicaid program (State
agency) was reimbursing providers in excess of State Medicare limits for durable medical
equipment (DME) and supplies used to provide oxygen.
FINDING
We determined that providers were paid amounts for DME and supplies that exceeded
the dollar amount allowed for similar items under the Medicare program. The higher
reimbursements occurred because the State agency did not update its reimbursement
limits for these items on a timely basis.
During our three year audit period ending December 31, 2000, the Medicaid program was
overcharged $727,000 (Federal share $511,397) for oxygen related DME and supplies
that were reimbursed at levels in excess of Medicare payment limits.
RECOMMENDATIONS
We are recommending that the State agency: (i) refund $727,000 (Federal share
$511,397) for excessive reimbursements to providers and (ii) ensure that the Medicaid
payment limits for oxygen related DME and supplies are updated on a timely basis.
STATE AGENCY COMMENTS AND OIG RESPONSE
In a response dated January 28, 2003, State agency officials disagreed with our findings
and recommendations. Their response is summarized in the body of the report and is
included in its entirety as an Appendix to this report.
State agency officials stated that from May 1989 until July 2000, the Medicaid program
paid providers of DME their usual and customary charges, not to exceed Medicare upper
limits. They further stated that Kentucky administrative regulations provide that
Medicaid fees will be revised annually on July 1, regardless of when Medicare fees are
revised. In addition, these officials argued that Department of Health and Human
Services, Departmental Appeals Board (DAB) decisions support their rationale to delay
implementation of the rates until July 1.
We acknowledge that the State agency revised the Medicaid fees each July 1, the date its
fiscal year begins. However, the Medicare rates, which according to the Kentucky
administrative regulations are the upper payment limits for the Medicaid program, are
effective January 1 each year. Our recommendations relate to the timing of the implementation of the Medicaid rates. The DAB decisions noted in the State agency’s
response are related to rate settings, primarily at long term care facilities, and are not
applicable to the recommendations. TABLE OF CONTENTS

Page
INTRODUCTION .................................................................................................................1

BACKGROUND ...................................................................................................................1

OBJECTIVE, SCOPE AND METHODOLOGY..................................................................1

Objective....................