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Md. claimed $20.6M in unallowable Medicaid costs

ANNAPOLIS — Maryland claimed at least $20.6 million in unallowable Medicaid costs and should pay the money back, a federal audit report released Friday says.

The report by the Office of Inspector General for the U.S. Department of Health and Human Services found Maryland’s health department did not comply with federal and state requirements when it claimed costs for residential habilitation services under its Community Pathways waiver program. Residential habilitation services help people with disabilities live in a community setting. The waiver provides home and community-based services to people with developmental disabilities in group homes, alternative living units or individual family care homes.

From July 1, 2009, through June 30, 2012, Maryland’s Department of Health and Mental Hygiene claimed $1.1 billion, with $648.6 million being the federal share, for residential habilitation services under the program. The inspector general received an allegation that the agency claimed unallowable costs for the services.

“The state agency claimed these unallowable costs because it lacked internal controls to ensure that unallowable costs were not included in claims for provider per diem payments,” the report said.

The audit sampled 100 claim lines. Of them, five complied with federal and state requirements and 95 did not. The 95 claim lines had 135 errors, the report said. For 81 claim lines, the state health department included unallowable costs for room and board. For 54 claim lines, the state agency reduced provider payments to reflect amounts in excess of room and board that providers had collected from beneficiaries but did not reduce claims for federal reimbursement accordingly. Forty claim lines included both errors, the report said.

Dr. Joshua Sharfstein, the health department’s secretary, wrote in the report that the state agrees with the inspector general’s findings.

Before December 2011, the department was incorrectly calculating the cost of room and board for people served by the department’s Developmental Disabilities Administration, Sharfstein wrote. He also wrote that due to inadequate controls between the Maryland Medicaid Information System and the DDA’s Provider Consumer Information System II, the costs removed prior to submission for federal reimbursement were insufficient.

DDA has taken steps to correct the problem, Sharfstein wrote.

Sharfstein also noted that changes were made to the MMIS system in May of last year to further reduce claims for federal reimbursement. Sharfstein said the DDA will be issuing added guidance to providers on how to calculate the correct cost of care to individuals.

“The department will actively monitor and review the effectiveness of these additional changes and guidance in order to ensure the ongoing appropriateness of claims submitted for federal reimbursements,” Sharfstein wrote.