Review of New York's Medicaid Rehabilitative Services Claims Submitted by Community Residence Providers

Based on our sample results, we estimated that New York State improperly claimed $207.6 million in Federal Medicaid reimbursement for rehabilitation services submitted by community residence rehabilitation providers during calendar years 2004 through 2007. Of the 100 claims in our random sample, 31 claims complied with Federal and State requirements, but 69 claims did not. These claims lacked (1) a physician's reauthorization for rehabilitation services based on a review of the recipient's service plan or case record, (2) a physician's initial authorization that included a face-to-face assessment of the recipient, (3) a rehabilitation service at least 15 minutes in duration, (4) a physician's authorization specifying the maximum duration of services needed by the recipient, (5) at least four different reimbursable rehabilitative services provided to the beneficiary for a monthly claim, and/or (6) a service plan reviewed and signed by a qualified mental health staff person. New York State elected to include coverage of rehabilitation services provided to recipients residing in community residences (group homes and apartments) in its Medicaid program.

We recommended that the State (1) refund $207.6 million to the Federal Government and (2) work with the State's Office of Mental Health to implement guidance to physicians regarding State regulations on the authorization of community residence rehabilitation services. The State disagreed with our first recommendation and agreed with our second recommendation.