EXECUTIVE SUMMARY:
This final report points out that, contrary to Medicaid reimbursement requirements, the State agency's Medicaid reimbursements to providers for clinical laboratory and pathology services exceeded what the Medicare program recognizes as reimbursement for the same services. We found that the State agency had not updated their clinical laboratory fee schedule since 1994. However, during this time, Medicare fee schedules for many services had actually decreased. Our analysis of State agency payments made during the period January 1996 through December 1999 for clinical laboratory and pathology services showed overpayments totaling $2,823,505 ($1,411,752 Federal share) were made for these services. We recommended that the State agency (1) implement procedures to update clinical laboratory fee schedules on a regular basis to ensure that amounts paid for clinical laboratory services do not exceed amounts that Medicare pays for the same services and (2) make a financial adjustment on the next Quarterly HCFA-64 Report of Title XIX expenditures in the amount of $2,823,505 ($1,411,752 Federal share). The State agency stated that it will adjust its next Quarterly HCFA-64 Report of Title XIX expenditures as recommended and also took action to update its laboratory fee schedule annually by obtaining the relevant information from Medicare.