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Department of Health and Human Services

Office of Inspector General -- AUDIT

"Medicaid Outlier Payments at Inpatient Hospitals in Texas," (A-06-04-00051)

May 18, 2006


Complete Text of Report is available in PDF format (738 kb). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.


EXECUTIVE SUMMARY:

Our objective was to determine whether the Texas Health and Human Services Commission (the State agency) limited cost outlier payments to exceptionally high-cost cases.  The State agency did not limit cost outlier payments to exceptionally high-cost cases.  Specifically, the State agency (1) did not use current cost-to-charge ratios, (2) used noncovered charges in calculating the outlier payments, and (3) did not have sufficient policies and procedures in place to monitor cost outlier payments.  We recommended that the State agency (1) revise its method of computing cost outlier payments and (2) develop policies and procedures to more closely monitor outlier payments.  Texas disagreed with our recommendation to revise its method of computing cost outlier payments but agreed to review its processes and update its formal policies.