OIG: The Majority of States Audited So Far Have Made Overpayments for Medicaid Meaningful Use

October 14th, 2016

An audit released in September by the Department of Health and Human Services’ Office of the Inspector General (HHS-OIG) shows California as among a majority of audited states that overpaid doctors and hospitals their Medicaid meaningful use incentive payments. The total cost of California’s overpayment was calculated by the OIG as $22 million.

A series of reports initiated by HHS-OIG at the end of 2014 focused on whether providers that received Medicare and/or Medicaid meaningful use incentive payments were entitled to the money. OIG said at that time that its main concern was not on individual providers, but on how well HHS’ agencies were overseeing the program and calculating the meaningful use payment. Of the approximately 16 state audits conducted so far, only Florida, Pennsylvania, and the District of Columbia were found to have correctly made the incentive payments.

California’s $22 million overpayment was calculated by looking at the 64 largest payees of the 263 hospitals that received Medicaid meaningful use payments. The incentive payments were calculated once and scheduled to be paid out over a four-year period; therefore, the payment due at the end of 2016 will also be incorrect. OIG estimates that if California withholds these payments, it will account for a $6.3 million savings to the program. OIG is asking California to refund the federal government the entire $22 million in overpayments. It also calls for California to review the calculations of payments to other providers that OIG did not audit and review all of the hospitals’ supporting documentation. The state of California does not agree with the OIG’s assessment of its overpayments and plans to challenge the OIG calculations.

California is not the only state challenging its Medicaid meaningful use audit. A recent audit revealed that Arizona overpaid 24 of 25 hospitals it reviewed by $15 million. Arizona is fighting the OIG, claiming the data the hospitals supplied is not the same data that it used to initially calculate the payments.

Other state audits have revealed overpayments as well. Oklahoma, West Virginia, Arkansas, Texas, and Washington made overpayments of $888,000, $1 million, $12 million, $15 million, and $9 million, respectively.

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