New York Improperly Claimed Medicaid Reimbursement for Family-Based Treatment Rehabilitation Services

The State agency did not claim Federal Medicaid reimbursement for family-based treatment (FBT) rehabilitation services in accordance with Federal and State requirements. Using our sample results, we estimate that the State agency improperly claimed $27.5 million in Federal Medicaid reimbursement during our January 1, 2005, through December 31, 2009, audit period. FBT rehabilitation services include training and assistance with daily living skills; medication management; and socialization, counseling, family support, and health services.

Of the 100 claims in our random sample, 16 claims complied with Federal and State requirements, but 84 claims did not. Of the 84 noncompliant claims, 58 contained more than 1 deficiency. These deficiencies occurred because (1) FBT rehabilitation providers did not fully comply with State regulations, (2) authorizing physicians were not familiar with applicable State regulations and program requirements, and (3) the State did not adequately monitor the program for compliance with certain Federal and State requirements.

We recommended that the State agency refund $27.5 million to the Federal Government. If the State agency does not close the FBT program by March 31, 2013-a date it has set as a deadline for closing the program-we further recommended that it (1) work with the State's Office of Mental Health (OMH) to provide guidance to the provider community on State regulations for FBT rehabilitation services, (2) work with OMH to provide guidance to physicians on State regulations and program requirements authorizing FBT rehabilitation services, and (3) improve its monitoring and oversight of the FBT program to ensure compliance with Federal and State requirements. The State agency disagreed with our first recommendation and generally disagreed with our findings.