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New York Overpaid Certain Medicaid Mental Health Services Providers

During a prior review of a Medicaid-funded mental health program in New York State (the State), we observed that some providers were paid more than the Medicaid base rate for certain services. These providers participated in the State's Comprehensive Outpatient Program Services (COPS) and Community Support Program (CSP) programs and, as program participants, received supplemental (add-on) payments subject to annual payment thresholds in exchange for offering "enhanced services" to Medicaid beneficiaries. We decided to review these add-on payments and other aspects of the State's COPS and CSP programs.

We identified COPS and CSP program overpayments totaling $8.1 million (Federal share) for the period 2009 through 2012. Although the State agency had credited to the Federal Government the Federal share of reviewed Phase I and Phase II overpayments that the State agency identified in its final reports, millions in overpayments remain uncollected. Specifically, the State agency continues to work with the State's Office of Mental Health (OMH) to collect $184 million ($92 million Federal share) in final report overpayments, plus an additional

$54.9 million ($27.4 million Federal share) in preliminary report overpayments for the period 2003 through 2008. Further, State agency officials indicated that $5.4 million ($2.7 million Federal share) in other overpayments made during this period were not collectable because of provider bankruptcy or business closure.

The overpayments occurred because the State agency did not have any financial management procedures in place to ensure that providers were not paid more than their annual thresholds, and the State agency did not initiate collection of overpayments until years after they occurred. We are not making any procedural recommendations in this report because the State agency discontinued the COPS and CSP programs in October 2013.

We recommended that the State agency (1) refund $8.1 million to the Federal Government for COPS and CSP overpayments for the period 2009 through 2012, (2) continue working with OMH to collect the additional $54.9 million ($27.4 million Federal share) in overpayments for the period 2003 through 2008 and return the applicable Federal share to CMS, (3) identify any overpayments made between the end of our audit period (December 2012) and when the State ended the COPS and CSP programs (October 2013) and refund the applicable Federal share, and (4) exhaust all legal efforts to collect the $5.4 million ($2.7 million Federal share) in overpayments that the State indicated were not collectable because of provider bankruptcy or business closure. The State agency agreed with our recommendations.

Copies can also be obtained by contacting the Office of Public Affairs at Public.Affairs@oig.hhs.gov.

Download the complete report.

Office of Inspector General, U.S. Department of Health and Human Services | 330 Independence Avenue, SW, Washington, DC 20201