Review of Medicaid Claims Made for Aged 21 to 64 Year Old Residents of Private Psychiatric Hospitals Within New York State

EXECUTIVE SUMMARY:

The objective of this review was to determine if controls were in place to effectively preclude New York State (NYS) from claiming Federal financial participation (FFP) under the Medicaid program for all medical services made on behalf of 21 to 64 year old residents of private psychiatric hospitals that are institutions for mental diseases.  This final report points out that although controls existed to prevent FFP from being claimed for inpatient psychiatric and alcoholism services, NYS did not have controls to prevent FFP from being claimed for other types of medical services provided to 21 to 64 year old residents of private psychiatric hospitals. As a result, we estimate that NYS improperly claimed $112,925 of FFP during our July 1, 1997 through September 30,2000 audit period.  Of this amount, $75,183 was for medical and ancillary claims, $36,710 was for inpatient claims, and $1,032 was for an improper inpatient psychiatric hospital claim.  We recommended that the State (1) refund $112,925 to the Federal Government for the improper FFP claims identified by our audit; (2) establish controls to prevent FFP from being claimed for medical services provided to residents of private psychiatric hospitals between the ages of 21 to 64 years old; and (3) identify and return the improper FFP claimed subsequent to our audit period.