The New York Medicaid program's massive overpayments were found by the inspector general's assessment of its rate-setting methodology for residential treatment facilities that care for developmentally disabled Medicaid beneficiaries, including people with autism or cerebral palsy. HHS' auditors found the Medicaid program allowed daily reimbursements to the developmental centers to outpace the rates charged by state-operated and privately operated facilities by an average of $2,584 for each patient in the state's fiscal year 2009. That rate was more than nine times the average daily rate charged to other payers by all such intermediate-care facilities in the state, according to the report.
Overall, the New York Medicaid program provided nearly $2.3 billion that year for the care of 1,688 such beneficiaries, while the actual cost of their care was less than $578 million, the report found.
The higher charges came despite “comparable” services provided to Medicaid and non-Medicaid patients by the facilities, the investigation found.
“This growth occurred because the state's rate-setting methodology significantly inflated the Medicaid daily rate for developmental centers, and CMS did not prevent the rate from increasing to its current levels,” the report says.
In response, the CMS said it was working with state officials to develop a revised payment methodology that will pay such facilities rates comparable to those paid by non-Medicaid sources.
The finding of the excessive payments followed two years of provider cuts by the state Medicaid program. The cuts for all Medicaid providers were enacted as part of the state's effort to close budget deficits stemming from recession-related drops in tax receipts.