Sneak Preview: Michigan Aims To Curb Medicaid Improper Payments

March 1, 2013 | By Jerry Ashworth | Post a Comment

(The following was excerpted from an article in the Single Audit Information Service.) Michigan health officials are developing an internal policies and practices manual for evaluating Medicaid payment rates for medical equipment and supplies after a recent Michigan Office of Auditor General audit identified more than $3.3 million in improper payments related to these items.

Medicaid provides coverage to eligible individuals for a variety of medical services, including coverage of durable medical equipment (e.g., wheelchairs), prosthetics, orthotics and supplies (DMEPOS). The Michigan Department of Community Health is responsible for establishing the state’s rates used to reimburse providers for DMEPOS issued to Medicaid-eligible individuals and for processing payment of DMEPOS claims through its electronic claims processing system.

OAG investigated about $181 million in DMEPOS claims paid under Medicaid from October 2009 to June 2012. It considered an improper payment to be a paid claim that did not comply with select Department of Community Health policies for DMEPOS.

In the audit, OAG listed several reportable conditions in which DCH did not ensure proper payment for DMEPOS, and identified some $2.347 million in known improper payments and another $209,000 in potential improper payments. In addition, OAG detected another $997,000 in improper payments (and about $1.6 million in potential improper payments) related to DCH’s process to establish DMEPOS reimbursement rates.

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