Montana Did Not Properly Pay Medicare Part B Deductibles and Coinsurance for Outpatient Services

We estimated that the Department of Public Health and Human Services (State agency) claimed unallowable Medicaid payments of $1.5 million ($1.1 million Federal share) during fiscal year (FY) 2009. The State agency did not always claim Medicaid payments for Medicare Part B deductibles and coinsurance for services whose payments are limited to State Medicaid plan rates in accordance with Federal requirements and the approved State plan. Specifically, for 79 of the 100 claims in our sample, the State agency did not limit payment of Medicare Part B deductibles and coinsurance to State Medicaid plan rates as required under the State plan.

These discrepancies occurred because the State agency did not compare the Medicare payment to the State Medicaid plan rate. The State agency did not make this comparison because it did not have policies and procedures requiring it to do so.

We recommended that the State agency (1) refund $1.1 million to the Federal Government for unallowable Medicaid payments for Medicare Part B deductibles and coinsurance and (2) develop and implement policies and procedures to ensure that it compares the Medicare payment to the State Medicaid plan rate to determine the allowable Medicare Part B deductibles and coinsurance for each crossover claim for outpatient services. The State agency disagreed with our finding and recommendations.