Audit of Medicaid Claims for Services Identified as Mutually Exclusive Procedure Codes at the Michigan Department of Community Health - January 1, 1996 through September 30, 1998

This final letter report presents the results of our Audit of Medicaid Claims for Services Identified as Mutually Exclusive Procedure Codes. The objective of our review was to determine the extent of potential overpayments or savings that could accrue to the Federal government and the State of Michigan if edits were implemented to identify and deny payments for procedure codes that the Health Care Financing Administration (HCFA) had identified as mutually exclusive. We determined that the State agency currently had edits in place that require pre-defined combinations of procedure codes to be reviewed before payment is made. Based on our review of payments for radiology and laboratory services made during our audit period of January 1, 1996 through September 30, 1998, we found that savings of approximately $240,000 could have been realized had these edits been in place.