NYS Overbilled $15 Billion for Medicaid Patients

11:57 PM, Sep 20, 2012   |    comments
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Gannett Washington Bureau

WASHINGTON - New York has over-billed the federal government at least $15 billion in Medicaid reimbursements for housing developmentally disabled patients, according to a congressional committee's report.

WEB EXTRAMay 2012 report by the Office of Inspector General of the Department of Health and Human Services

The excessive billing took place over the last 20 years, according to an advance copy of the report obtained by Gannett from the House Committee on Oversight and Government Reform. The committee estimates that over-billing in 2011 alone amounted to $1.27 billion for 1,313 patients at New York facilities.

In 2009, the federal government spent more money reimbursing New York for housing 1,400 patients at the state's largest developmental centers than it spent reimbursing any of 14 other states for all Medicaid recipients, the committee report said.

Vermont, for instance, was reimbursed less for all of its 182,045 Medicaid enrollees. And Nevada was reimbursed less for all 290,435 of its Medicaid recipients.

Officials at the Department of Health and Human Services acknowledge they've been aware of the problem since at least 2007.

Two top HHS officials are to testify before the oversight committee Thursday to explain why the over-billing has continued.

HHS officials say they couldn't take action because legislation passed in 2007 prohibited the agency from enacting new rules imposing lower maximum payments to government Medicaid providers, according to written testimony submitted to the committee.

The oversight committee's report also says that when one of its staffers asked Gov. Andrew Cuomo's administration earlier this month for information on the over-billing, Cuomo's special counsel, Alexander Cochran, declined, saying state officials "are working through these issues.''

Medicaid is a shared federal-state program. New York state officials use a complex formula to bill the federal government for high-needs patients at large state facilities who have may have multiple medical conditions and require more intense staff support. The state bills Washington for what's described as reimbursable costs rather than the actual cost of providing those services.

Federal officials issued a waiver in 1986 - retroactive to 1984 - giving New York permission to do that. Since then, the waiver has been modified 35 times, according to the HHS inspector general.
The over-billing issue became public in June 2010, when the Poughkeepsie (N.Y.) Journal began running stories focusing on excessive reimbursements for Medicaid services at the Wassaic Developmental Center.

The stories reported high Medicaid costs at all the state's housing facilities for the mentally and developmentally disabled. They also reported that former Gov. Mario Cuomo - the current governor's father - and other state officials had called for closing the facilities by 2000, but those plans were delayed and the over-billing increased during the ensuing decade, helping the state balance its budget.

New York's Office for People with Developmental Disabilities provides services for more than 126,000 people who are intellectually disabled or have developmental disabilities such as autism or cerebral palsy.

Many New Yorkers in those categories who also have high needs are housed in group homes or privately run intermediate care facilities that are much less expensive to operate than the state facilities. But some of the most severely disabled are housed in 13 state-run facilities with more than 30 beds each.

Three weeks after the Poughkeepsie Journal's first story, the federal Centers for Medicare and Medicaid Services began an inquiry.

In May, the office of inspector general at HHS found that the actual cost of operating the state facilities in fiscal 2009 was "63 percent less than the calculated reimbursement rate.''

The inspector general also found that, even after a patient is discharged, the state continues to receive 64 percent of its prior reimbursement for the patient. In addition, New York bills the federal government a second time for that same former patient's costs at a group home or other setting.

The May report from the inspector general said that in 2009, New York billed the federal government $1.5 million for each patient at a state-run center for the developmentally disabled. The bill increased to $1.9 million per patient in 2011.

Not only did the federal government pay the bill, the state's 50-percent reimbursement rate rose to as much as 58 percent during that period because of a provision in the 2009 federal stimulus package aimed at boosting the economy.

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