New York Claimed Nonhospital-Based Continuing Day Treatment Services That Were Not in Compliance With Federal and State Requirements

The New York State Department of Health (State agency) claimed Federal Medicaid reimbursement for nonhospital continuing day treatment (CDT) services claims that did not comply with Federal and State requirements. Of the 100 claims in our random sample, 66 claims complied with Federal and State requirements, but 34 claims did not.

The deficiencies occurred because (1) certain nonhospital CDT providers did not comply with Federal and State regulations and (2) the State agency did not ensure that OMH adequately monitored the CDT program for compliance with certain Federal and State requirements. On the basis of our sample results, we estimated that the State agency improperly claimed at least $18.1 million in Federal Medicaid reimbursement for nonhospital CDT services that did not meet Federal and State requirements.

We recommended that the State agency (1) refund $18.1 million to the Federal Government, (2) work with the State's Office of Mental Health (OMH) to issue guidance to the provider community regarding Federal and State requirements for claiming Medicaid reimbursement for nonhospital CDT services, and (3) work with OMH to improve OMH's monitoring of the CDT program to ensure compliance with Federal and State requirements. The State agency disagreed with our first recommendation (financial disallowance) and did not indicate concurrence or nonconcurrence with our remaining recommendations.