Compliance with New York State Medicaid Inpatient Prospective Payment System Transfer Regulations

EXECUTIVE SUMMARY:

The objectives of our audit were to determine whether (1) Prospective Payment System (PPS) hospitals were paid in accordance with New York State (NYS) Medicaid policy when beneficiaries were transferred to other PPS hospitals, and (2) Medicaid overpayments resulted from the incorrect coding of the patient (discharge) status on claims for the transferred beneficiaries. For the most part, PPS hospitals in NYS were paid in accordance with Medicaid policy when beneficiaries were transferred to other PPS hospitals.  However, we noted a relatively small number of exceptions that resulted from the incorrect coding of the patient (discharge) status on claims for the transferred beneficiaries.  The NYS Department of Health (DOH) overpaid a total of $986,316 ($493,158 Federal share) for 74 of the 185 claims reviewed.

We recommended that NYS DOH (1) refund $493,158 to the Federal Government for its share of the identified overpayments, (2) research the economic feasibility of analyzing the remaining claims in our universe to determine if they resulted in overpayments to PPS hospitals, and (3) instruct hospitals to review all internal procedures and processes related to claims submission to assure that PPS transfers are properly reported.