Medicare Compliance & Reimbursement

Audit could affect lab payments.

The HHS Office of Inspector General says the state of Massachusetts overcharged the federal government $4.1 million.

After reviewing the state's Medicaid laboratory billing system, the watchdog agency determined that the state's Medicaid payments for hospital outpatient and pathology tests exceeded the rates allowed by the Medicare program, a disparity that violates The Social Security Act.

The analysis, titled "Review of Claims Paid for Clinical Diagnostic Laboratory Services Under the Massachusetts Revised Fee Schedule" (A-01-02-00015), showed that of the $29 million in hospital outpatient laboratory claims submitted by the State for the period July 1999 through March 2002, $8.2 million ($4.1 million Federal share) exceeded the Medicare fee schedule amounts.

Furthermore, the study concluded the State's procedures were not adequate to ensure that amounts claimed for Medicaid laboratory services and submitted for Federal reimbursement complied with the Medicare fee schedule.

The OIG recommended that Massachusetts make an adjustment of $8.2 million on the next quarterly report of expenditures and ensure that amounts claimed for hospital laboratory services and submitted for Federal reimbursement do not exceed the Medicare fee schedule amounts.

To see the report, go to http://oig.hhs.gov/oas/reports/region1/10200015.pdf.


Lesson Learned: Labs should take notice when the OIG starts looking into their states' Medicaid payment policies.