Evidence record

California's Medicaid Reimbursements for Clinical Diagnostic Laboratory Services

Jurisdiction
California
Audit organization
U.S. Department of Health and Human Services Office of Inspector General
Publication date
June 2026
Source record
Original document linked
Open original reportOriginal source available

Findings

4

Recommendations

4

Overall conclusion

The State agency did not always claim Federal Medicaid reimbursement for clinical diagnostic laboratory services in accordance with Federal and State requirements, resulting in overpayments totaling $13.9 million (Federal share) and potentially $29.3 million (Federal share not specified in the summary). The overpayments arose from failure to update rate tables; the State concurred with the recommendations and described corrective actions.

Scope

Calendar years 2019–2023, California's fee-for-service Medicaid payments for clinical diagnostic laboratory services, limited to claim types 8013 (hospital outpatient), 8014 (hospital lab services to nonpatients), and 8700 (professional), with HCPCS codes on the Medicare fee schedules; totaled 36,252,751 services and $632,164,882 paid ($345,122,316 Federal share) during the audit period; 3,123,613 services reviewed for overpayments totaling $107,508,910 ($59,616,155 Federal share).

Findings (4)

Each finding has a stable link.

  1. F-1246

    For 2,186,277 of 3,123,613 services reviewed, California paid providers more than they would have been paid under the Medicare CLFS or the amounts allowed by State requirements.

  2. F-1247

    Additionally, for 211,171 services, California potentially paid providers more than they would have been paid under the Medicare program or the amounts allowed by State requirements for GDSP services; CMS-SPA status unclear prior to SPA approvals.

  3. F-1248

    The overpayments occurred because the State agency did not follow its policies and procedures for reviewing and updating laboratory rates in its claims processing system, attributed to a clerical error.

  4. F-1249

    In total, the Federal reimbursement claimed exceeded the rates allowed by Federal and State requirements by $13,892,037 ($7,576,103 Federal share) and potentially exceeded by $29,319,373 ($16,477,416 Federal share).

Recommendations (4)

  1. R-1103

    Refund $7,576,103 to the Federal Government.

    Related finding F-1249
  2. R-1104

    Work with CMS to determine whether potential overpayments of $16,477,416 (Federal share) complied with Federal and State requirements and refund the Federal share of any overpayments to the Federal Government.

    Related finding F-1249
  3. R-1105

    Review payments made after the audit period to identify any additional overpayments and refund the Federal share to the Federal Government; clearly identify refunds as such.

    Related finding F-1248
  4. R-1106

    Evaluate and strengthen existing policies and procedures for reviewing and updating rates in the claims processing system to ensure that amounts claimed do not exceed Medicare or State requirements.

    Related finding F-1248