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December 17, 2007


State Audit Identifies Improper Medicaid Billing
by Psychiatrist; Finds Total of $1.3 Million in
Overpayments to Mental Health Service Providers

DOH Says it Will Make Changes

A psychiatrist improperly billed Medicaid on eight separate occasions for more than 24 hours of treatment in a single day and appears to have billed for patients he never treated, among other improper practices, according to an audit released today by State Comptroller Thomas P. DiNapoli.

“Most doctors work hard, but it is difficult to imagine how anyone can put in more than 24 hours in one day on multiple occasions,” DiNapoli said. “This should have immediately raised red flags and the psychiatrist should never have been paid. Better systems must be put in place by the Department of Health to prevent these types of payments from being made in the first place.”

In an analysis of payments for mental health services from August 1999 to October 2006, auditors identified more than $1.3 million in Medicaid overpayments for mental health services – many of which could have been prevented with additional controls in the eMedNY Medicaid claims processing system. The State Department of Health (DOH) administers Medicaid and the eMedNY system.

Among the audit’s primary findings:

  • One mental health provider who was paid more than $436,000 billed Medicaid on eight separate occasions for more than 24 hours -- and as high as 42 hours in one instance -- of service in a single day.
    He admitted to auditors he did not see certain patients for which he billed Medicaid. Auditors also discovered his clinical social worker saw certain patients but Medicaid was billed at the higher psychiatrist’s rate.
  • 389 providers submitted more than 27,000 claims valued at $662,000 for mental health services and pharmacologic management provided on the same day. Under Medicaid rules, psychiatrists who provide mental health evaluation and management services for patients cannot bill the program for prescribing medication -- known as pharmacologic management -- on the same day.
  • 106 clinic-based mental health practitioners received 21,132 payments totaling more than $381,000 from June 2002 through December 2005 for services for which the clinic also received payment. When services are provided at clinics, only the clinic not the individual service provider is permitted to bill Medicaid.
  • 1,898 instances were identified in which 27 different clinics had billed Medicaid twice at different rates for the same services. From June 2001 through October 2006, the overpayments totaled $302,568.

Auditors met with nine of these providers who double billed, eight of whom indicated that they were confused about the rules and misinterpreted DOH policy. The auditors recommended that DOH add a control to the eMedNY system to block payment for pharmacologic management when it is billed in conjunction with other mental health services. Auditors made a similar recommendation to improve the eMedNY system to block duplicate payments.

DOH indicated in its response to the audit that it would implement recommended controls and other strategies to avoid many of the overpayments found by auditors and would seek to recover any funds paid to providers in error. The complete response is included in the audit.

The findings of the audit have been referred to the Office of the Attorney General.

About the State Comptroller’s Medicaid Oversight
The Office of the State Comptroller conducts regular audits of the state’s $47 billion Medicaid program, identifying hundreds of millions of overpayments and fraud. Auditors review Medicaid claims that have been submitted by service providers and identify billing patterns and other circumstances that warrant an examination to determine whether claims are valid and appropriate. In 2007 alone, the State Comptroller’s Office identified more than $43 million in potential overpayments or inappropriate claims paid by the state’s Medicaid program.

Click here for a copy of the audit.

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