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New York Claimed Hospital-Based Continuing Day Treatment Services That Were Not in Compliance With Federal and State Requirements

The New York State Department of Health (DOH) claimed Federal Medicaid reimbursement for continuing day treatment (CDT) services provided by hospital-based providers that were not in accordance with Federal and State requirements. CDT services include assessment and treatment planning, discharge planning, medication therapy, case management, psychiatric rehabilitation, and activity therapy, among others.

On the basis of our sample results, we estimated that DOH improperly claimed at least $8.3 million in Federal Medicaid reimbursement during our April 1, 2009, through August 15, 2011, audit period.

Of the 100 claims in our random sample, 57 claims complied with Federal and State requirements, but 43 claims did not. Of the 43 noncompliant claims, 9 contained more than 1 deficiency. These deficiencies occurred because (1) certain hospital-based CDT providers did not comply with Federal and State requirements and (2) DOH did not ensure that the State Office of Mental Health (OMH) adequately monitored the CDT program for compliance with certain Federal and State requirements.

We recommended that DOH (1) refund $8.3 million to the Federal Government, (2) work with OMH to issue guidance to the hospital-based provider community regarding Federal and State requirements for claiming Medicaid reimbursement for CDT services, and (3) work with OMH to improve OMH's monitoring of the CDT program to ensure compliance with Federal and State requirements. DOH disagreed with our first recommendation and did not indicate concurrence or nonconcurrence with our remaining recommendations.

Filed under: Centers for Medicare and Medicaid Services