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Louisiana Did Not Comply With Federal and State Requirements Prohibiting Medicaid Payments for Inpatient Hospital Services Related to Provider-Preventable Conditions

Louisiana did not comply with Federal and State requirements prohibiting Medicaid payments for inpatient hospital services related to treating certain provider-preventable conditions (PPCs) because it did not have controls to identify claims with PPCs that would have required a reduction in claim payment. We identified inpatient hospital claims totaling $55.4 million ($34.9 million Federal share) that contained a diagnosis code identified as a PPC and certain present-on-admission (POA) codes, or the claims were missing POA codes.

We recommended that Louisiana (1) work with the Centers for Medicare & Medicaid Services to determine what portion of the $34.9 million Federal share claimed was unallowable for Federal Medicaid reimbursement and refund to the Federal Government the unallowable amount; (2) review all claims before our audit period (with dates of admission from July 1, 2012, and paid through December 31, 2012), and all claims paid after our audit period (June 30, 2017), to determine whether payments should be reduced for any claims that contained PPCs, refunding to the Federal Government its share of any unallowable amounts; and (3) strengthen its internal controls to ensure hospitals submit services related to PPCs as noncovered days, postpayment reviews are conducted, and POA codes are submitted on claims.

Louisiana agreed with our recommendations and described actions it will take to address the recommendations.