Corporate Compliance

OIG: Hawaii should refund $9,532 for ancillary services

Compliance Monitor, March 15, 2006

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The OIG determined that Hawaii overpaid nursing facilities for a small number of ancillary services.

The OIG audit further determined that the state could not support the reasonableness of its negotiated prospective payment system (PPS) rates for subacute care.

The OIG conducted the audit to determine whether Hawaii's reported Medicaid expenditures for services provided to beneficiaries in nursing facilities complied with federal and state requirements for the period of July 1, 2003, through June 30, 2004.

In general, Hawaii's reported Medicaid expenditures for services provided to beneficiaries in nursing facilities complied with requirements, aside from the overpayments, the OIG found.

The OIG recommended that Hawaii

  • refund $9,532 to the federal government, representing the federal share of the overpayments related to ancillary services

  • enforce Hawaiian administrative rules requiring nursing facilities to separately account for subacute care costs on their cost reports, so that Hawaii can ensure that its negotiated PPS rates are reasonable

    To conduct the audit, the OIG:

  • reviewed applicable laws, regulations, policies, and procedures

  • interviewed related officials

  • reconciled line 3, Nursing Facility Services expenditures, of the CMS-64.9s to Hawaii's fiscal year 2004 paid claims database

  • traced line 3 of the CMS-64.9s to supporting worksheet schedules for July 1, 2003 through June 30, 2004

  • verified that the PPS rates used in reimbursing nursing facilities were properly calculated and agreed with the requirements of the state plan

  • analyzed ancillary service expenditures to ensure that they were associated with a related room-and-board stay and reimbursed pursuant to the Hawaii state plan

  • conducted computer database analyses comparing expenditures for laboratory and radiological services and other care services shown on lines 11 and 29 of the CMS-64.9s, respectively, with line 3 to identify any potential duplicative billings

  • performed computer database analyses to determine whether Hawaii complied with the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 to deny Medicaid coverage to aliens from the Compact of Free Association states (the Federated States of Micronesia, the Republic of the Marshall Islands, and the Republic of Palau)

      Click here to read the audit report, "Audit of Hawaii's Medicaid Expenditures for Nursing Facility Services for the Period July 1, 2003, Through June 30, 2004," (A-09-05-00058) issued February 17, 2006.



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