Department of Health and Human Services

Office of Inspector General -- AUDIT

"Medicaid Denial of Payment Remedy for Sanctioned Nursing Homes in the Commonwealth of Pennsylvania," (A-03-03-00211)

June 9, 2004


Complete Text of Report is available in PDF format (615 kb). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.


EXECUTIVE SUMMARY:

This final report points out that the States controls were not adequate to prevent improper Medicaid payment to nursing homes that were under a denial of payment sanction.  Title XIX, section 1919, of the Social Security Act and 42 CFR 488 require that the State establish adequate controls over the mandatory denial of payment sanction.  Of the 73 nursing homes that were sanctioned during our audit period, 13 received unallowable Medicaid payments for new admission residents because the State Medicaid agency had not implemented pre‑payment edits or post-payment reviews during the period of our review to ensure that only allowable services were paid to nursing homes.  As a result, the State Medicaid agency made Medicaid payments totaling $75,342 (Federal share $40,553) to the 13 nursing homes for residents who were admitted during the sanction periods.  We also noted that 101 of 653 Medicaid certified nursing homes surveyed by the State received a deficiency with a scope and severity code that required a denial of payment sanction that were not identified on the CMS and State lists of sanctioned nursing homes.  The denial of payment sanction was warranted because those nursing homes had not reached substantial compliance within 3 months of having the deficiency identified by the State survey agency.  As a result, the State could have made Medicaid payments to those nursing homes for new admissions during those sanction periods because they had not identified them as requiring a mandatory denial of payment sanction.