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Audit (A-02-06-01007)

04-09-2009
Review of Inpatient Hospital Claims Billed as Family Planning Services Under the New York State Medicaid Program

Executive Summary

New York State improperly claimed enhanced 90-percent Federal reimbursement for inpatient family planning claims submitted by hospitals. Of the 173 claims in our sample, 3 qualified as family planning services and could be claimed at the enhanced 90-percent Federal reimbursement rate. However, the remaining 170 claims could not be claimed as family planning services or could be claimed only in part as family planning services. Based on our sample results, we estimate that the State received $2.6 million in unallowable Federal Medicaid reimbursement.

This overpayment occurred because (1) providers incorrectly claimed services as family planning, (2) the State's Medicaid Management Information System (MMIS) edit routines did not adequately identify claims unrelated to family planning, (3) the State did not have procedures to allocate the costs of inpatient hospital claims partially related to family planning, and (4) providers did not properly complete sterilization consent forms.

We recommended that the State (1) refund $2.6 million to the Federal Government, (2) reemphasize to providers that only services directly related to family planning should be billed as family planning, (3) ensure that MMIS edit routines properly identify claims that are ineligible for enhanced 90-percent Federal reimbursement, (4) develop procedures to properly allocate the cost of inpatient hospital stays partially related to family planning, (5) reinforce guidance to hospitals regarding Medicaid sterilizations, and (6) determine the amount of Federal Medicaid funds improperly reimbursed for claims unrelated to family planning subsequent to our audit period and refund that amount to the Federal Government. In its comments on our draft report, the State generally agreed with our recommendations and described actions that it will take in response.

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