Corporate Compliance

GOV’T AUDIT INSIDER: Medicaid payments in excess of Medicare-allowable amounts

Healthcare Auditing Weekly, August 17, 2004

According to an OIG audit report, Medicaid paid providers more than Medicare would have for oxygen-related durable medical equipment (DME) and supplies in six of nine OIG audited states.  State plans for 12 states and the District of Columbia require that Medicaid rates for DME and supplies not exceed the Medicare fee schedules. The schedules are updated annually and organized by Healthcare Common Procedure Coding System (HCPCS).  According to the audit report, Medicaid payments were approximately $12.7 million in excess of Medicare amounts in six of the states from the period of January 1, 1998, through December 31, 2000.  The OIG recommends that CMS instruct those state agencies to apply Medicaid payment limits correctly and in a timely manner.  During the audit, the OIG did the following

  • Identified the codes used to claim reimbursement for oxygen-related DME and supplies provided to Medicaid beneficiaries

  • Obtained the Medicare and Medicaid payment limits for oxygen-related DME and supplies

  • Obtained Medicaid claim data for HCPCS numbers identified as oxygen-related DME supplies on the Medicare fee schedules

  • Calculated the overpayments or potential for savings associated with limiting Medicaid payments to the applicable Medicare payment limit

    Click here to read the audit report, "Audit of Medicaid Payments for Oxygen-Related Durable Medical Equipment and Supplies" (A-05-03-00018), released July 16.

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