Medicaid Program: Improper Medicaid Payments for Individuals Receiving Hospice Services Covered by Medicare
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The Office of the Inspector General notes that it is not expressing an opinion on the State Comptroller’s report or its results; however, the OSC encourages CMS to consider the report and its results and work with state partners to ensure the federal share of improper Medicaid payments identified is refunded to the Federal Government and to prevent such payments from occurring in the future.
Source Document
Audit Scope
The audit focused on New York State’s Medicaid program payments for dual-eligible individuals receiving Medicare-covered hospice services, examining both Fee-For-Service and Managed Care arrangements. It covered the period January 1, 2015 through July 31, 2019. The assessment included matching CMS Medicare hospice claims with New York Medicaid claims from the Transformed Medicaid Statistical Information System, analyzing the Department of Health’s eMedNY data, and reviewing a judgmental sample of 50 cases (35 with extensive Medicaid personal care services and 15 with large DME/supply usage) plus an additional 7 cases involving overlapping hospice and Medicaid aide services. It involved hospice providers, Medicaid MLTC plans, Local Departments of Social Services, and Medicaid providers to evaluate care coordination, documentation, billing practices, and policy compliance. It also examined related services exemptions (ALP, PACE, CHHA, LTHHCP) and the adequacy of processes to identify dual-eligibles who elect Medicare hospice.
Key Findings Summary
Approximately $50 million in actual and potential Medicaid overpayments, cost-saving opportunities, and questionable payments identified for dual-eligibles in Medicare-covered hospice care, including: $5.5 million in overpayments for services not allowed in conjunction with hospice or overlapping with hospice-covered benefits; $370,506 in overpayments for pe…
$1.1 million in potential overpayments for services likely should have been covered by hospice providers, and $1,093,617 + $74,693 (total $1,168,310) in potential overpayments for services related to hospice terminal diagnoses.
$74,693 in payments for drugs that CMS guidance suggests should not be paid by Medicaid when the recipient is in hospice.
View the Findings tab to see all 10 findings
AI-Assisted
AI Scope Summary
Identify and quantify improper Medicaid payments associated with dual-eligible individuals receiving Medicare-covered hospice, and develop actionable controls to prevent recurrence and improve coordination among hospice providers, MLTC plans, LDSS, and Medicaid.
AI-Generated Insight
This audit reveals significant gaps in New York’s oversight of Medicaid payments for dual-eligible individuals receiving Medicare-covered hospice, identifying about $50 million in actual and potential overpayments and emphasizing coordination weaknesses among hospice providers, MLTC plans, and LDSS. It underscores the need for better data sharing, beneficiary tracking, and policy alignment to ensure Medicaid pays only for services unrelated to terminal illness when hospice is the primary Medicare benefit.
Audit Objectives
Determine whether Medicaid made improper payments to providers on behalf of dual-eligible individuals receiving hospice care covered by Medicare.
Audit period covered: January 1, 2015 through July 31, 2019.
Audit Findings (10)
Approximately $50 million in actual and potential Medicaid overpayments, cost-saving opportunities, and questionable payments identified for dual-eligibles in Medicare-covered hospice care, including: $5.5 million in overpayments for services not allowed in conjunction with hospice or overlapping with hospice-covered benefits; $370,506 in overpayments for personal care services in excess of 24 hours in a day; $39.8 million in payments for personal care and durable medical equipment and supplies that may have been covered by Medicare hospice; and $4.3 million in unnecessary payments for nursing home room and board under managed care.
$1.1 million in potential overpayments for services likely should have been covered by hospice providers, and $1,093,617 + $74,693 (total $1,168,310) in potential overpayments for services related to hospice terminal diagnoses.
$74,693 in payments for drugs that CMS guidance suggests should not be paid by Medicaid when the recipient is in hospice.
$3,413,546 in potential overpayments for non-hospice services such as CHHA/HHAs, private duty nursing, adult day care, and adult day transportation.
$4.1 million in questionable payments for DME and supplies where the diagnosis may not relate to the terminal illness.
$35.7 million in questionable payments for personal care services where hospice did not provide any aide services (with estimated breakdown and overlapping cases).
$4.3 million in unnecessary payments for nursing home room and board under managed care (part of $85 million in total MLTC payments for dual-eligibles in hospice).
$1.093 million in Medicaid payments for services related to hospice terminal diagnoses that should have been covered by Medicare hospice (e.g., COPD case with duplicate billing).
$527,397 in DME payments and other items where the diagnosis did not relate to terminal illness.
Department has not established sufficient controls to ensure Medicaid payments (FFS and managed care) are appropriate for dual-eligibles receiving Medicare-covered hospice care.
Recommendations (9)
Consider requiring non-hospice service providers to document the reason a service is provided outside of the hospice benefit (e.g., diagnoses or conditions) and, accordingly, not related to a recipient’s terminal illness.
Assess the appropriateness of requiring Medicaid MCOs to pay 95 percent of the nursing home room and board rate for dual-eligibles enrolled in hospice and, if warranted, take steps to implement any changes.
Review the $5.9 million in actual and potential overpayments and ensure proper recoveries are made.
Design and implement a process to identify and track all Medicaid recipients who elect Medicare-covered hospice care (coordinate with CMS, as appropriate).
Establish controls to prevent Medicaid FFS and managed care payments for services that should be covered by Medicare hospice, particularly for the types of services identified in this audit.
Formally remind MLTC plans and LDSS (for recipients not enrolled in MLTC plans) to coordinate services and financial obligations with hospice providers, particularly for personal care and DME and supplies.
Formally remind hospice providers of their role in coordinating services unrelated to recipients’ terminal illnesses with Medicaid providers and MCOs, particularly personal care and DME and supplies.
Monitor MLTC plans and LDSS to ensure they maintain adequate documentation of hospice recipients’ conditions and services that are unrelated to the terminal illness that should be covered by Medicaid when approving services (such as personal care services and DME and supplies).
Update relevant Medicaid policies to coincide with new billing, payment, and policy changes made in response to this audit.