Colorado Did Not Properly Pay Some Medicare Part B Deductibles and Coinsurance

During FYs 2011 and 2012, the Colorado, the Department of Health Care Policy and Financing (State agency) did not always claim Medicaid payments for Medicare Part B deductibles and coinsurance in accordance with Federal requirements and the approved State plan. For 30 of the 100 claims in our sample, the State agency did not limit payment of Medicare Part B deductibles and coinsurance by State Medicaid plan rates as required under Colorado's Medicaid State plan. Because Federal requirements provide that a State plan for medical assistance is mandatory upon the State and all of its political subdivisions, these 30 claims thus violated Federal requirements as well as the requirements of the State plan.

These errors occurred because the State agency did not compare the Medicare payment to the State Medicaid plan rate as required by the State plan. The State agency did not make this comparison because it did not have policies and procedures requiring it to do so for all Medicare Part B crossover claims. On the basis of our sample results, we estimate that the State agency claimed unallowable Medicaid payments of at least $3.1 million ($1.7 million Federal share) during FYs 2011 and 2012.

We recommended that the State agency (1) refund $1.7 million to the Federal Government for unallowable Medicaid payments for Medicare Part B deductibles and coinsurance and (2) develop and implement policies and procedures to ensure that it compares the Medicare payment to the State Medicaid plan rate, as required by the State plan, to determine the allowable Medicare Part B deductibles and coinsurance for all crossover claims. The State agency did not concur with our recommendations.