Medicare Compliance & Reimbursement

Enhanced-rate payments not possible on certain overhead costs.

Providers in states that charge the government more than their share of enhanced costs for skilled medical personnel could face paying millions in refunds.

The California Department of Health Services should refund approximately $5.3 million to the federal government for allegedly overcharging for costs associated with skilled professional medical personnel and their supporting staff, the HHS Office of Inspector General (OIG) said in a Sept. 8 audit report.

From Oct. 1, 2002 to Sept. 30, 2003, the state purportedly claimed federal Medicaid funding for overhead costs that weren't eligible for payment at an enhanced rate and salaries and other compensation for 43 supporting staff that didn't receive direct supervision from skilled professional medical personnel.

Result: The OIG wants the state to refund $5.3 million in overpayments and identify and refund the federal share of overpayments for skilled professional medical personnel and their supporting staff that it charged after Sept. 30, 2003. The state didn't comment on the OIG's request for the refund, but agreed to correct its improper claims.

To read the audit report, go to http://www.oig.hhs.gov/oas/reports/region9/90400049.pdf.