Excessive Payments for Pathology and Laboratory Services Under Virginia's Medicaid Program for Calendar Years 1995 and 1996

EXECUTIVE SUMMARY:

This final audit report points out that the State agency made excessive Medicaid payments totaling $1,629,750 (Federal share) for pathology and laboratory services in Calendar Years 1995 and 1996. The payments were excessive because they exceeded Medicare limits. The State Medicaid Manual limits Medicaid reimbursement for clinical laboratory tests to no more than amounts recognized by the Medicare program. We recommended that the State agency: (1) revise its laboratory fee schedule amounts to conform to limits established by the Medicare program; (2) implement procedures to monitor changes to Medicare laboratory fee schedules to ensure that Medicaid fees do not exceed Medicare limits; and (3) make a financial adjustment for $1,629,750.