Corporate Compliance

PA Medicaid agency miscalculates DSH eligibility

Healthcare Auditing Weekly, April 14, 2009

An April 1 OIG report shows that the Pennsylvania Department of Public Welfare, which administers the Pennsylvania Medicaid program, failed to properly determine the eligibility of institutions for mental diseases (IMDs) for Medicaid disproportionate share hospital (DSH) payments in fiscal year 2008-2009.

According to Title XIX of the Social Security Act, IMDs must have a Medicaid inpatient utilization rate (MIUR) of at least 1% to be eligible for DSH payments. The act also requires they have a low-income utilization rate (LIUR) in excess of 25%. There are also requirements regarding the age of patients.

The OIG’s audit found the state agency miscalculated the MIUR percentage by including unallowable age groups and inmates held in the IMDs by the state’s criminal justice system. Also, the state agency did not compute an LIUR, according to the report. When computed properly, the IMDs in question remained eligible for DSH payments, but the OIG expressed concern that the faulty methodology could result in inappropriate future payments.

The OIG recommended the state agency amend its state plan to comply with federal requirements concerning the exclusion of unallowable inpatient days and costs from its MIUR and LIUR calculations, according to the report.

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