Sneak Preview: Disallowance Reversed for Massachusetts Medicaid Claim

February 20, 2014 | By Jerry Ashworth | Post a Comment

xgran_bookshot(The following was excerpted from an article in the Federal Grants Management Handbook.) The Massachusetts Office of Health and Human Services successfully overturned much of a prior disallowance from the Department of Health and Human Services for Medicaid reimbursements, winning $17.3 million back from a $21.5 million disallowance upon appeal. State health departments that provide supplemental Medicaid payments to medical facilities must receive timely and adequate notice from HHS, Centers for Medicare and Medicaid Services, the Appeals Board ruled.

Because CMS did not provide such notice to MOHHS in response to the state’s 2005 request for about $21.5 million for Medicaid reimbursement for expenses incurred in fiscal years 2000 through 2002, the HHS Departmental Appeals Board overturned CMS’ disallowance $17.3 million of that request. It did uphold part of the disallowance of $4.2 million.

From FY 2000 to FY 2002, MOHHS provided standard Medicaid rate payments to UMass Memorial, a nonprofit corporation representing five hospitals in the state. In FY 2005, it made supplemental payments to each of the hospitals for patient care services provided from FY 2000 to FY 2003. The supplemental payments were calculated using a methodology separate from the one used to calculate the standard rate payments.

In September 2005, MOHHS filed an initial claim of about $27 million in federal reimbursement for the supplemental payments made to the hospitals from FY 2000 to FY 2003, although it later reduced the claim to $25.5 million. CMS deferred a decision on the payments in March 2006. In February 2011, CMS disallowed the $25.5 million in claims, stating that MOHHS did not file the claim within two years after the calendar quarter in which the expenditures were made. CMS contended that the supplemental payments made to the hospitals constituted as adjustments to prior year claims, or “add-ons” to the standard rates. CMS later determined that MOHHS had timely claimed the FY 2003 reimbursements, but still disallowed $21.5 million.

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