Health, Department of
An Audit Report on the Analysis of Potential Overpayments through the Medicaid Program
Report Number 96-003
Estimated annual Medicaid savings of $736,000 could be realized by improving controls designed to detect specific types of Medicaid overpayments.
The Texas Department of Health (Department) could save approximately $369,000 if the Department could recover laboratory payments made in error during 1994. Controls have been added by the contractor which should reduce these overpayments in future years if implemented properly. The omission of certain procedure codes from the contractor s payment system appears to be the prevalent reason for these overpayments.
The Department could save approximately $824,000 annually by extending the Department s policy of denying related outpatient claims paid 24 hours prior to the admission as an inpatient to three days. Although the Department s current Medicaid policy is within federal requirements, Medicare regulations require a three-day payment policy.
The appropriate use of one payment code by providers may provide for additional savings. We identified an apparent misuse of this code relating to the unreasonable quantity of chemistry tests performed when the payment code is used. Our estimates indicated that approximately $997,000 was paid to providers in 1994 when the characteristics of this misuse existed.
The Department s Statistics and Analysis Division identified and referred approximately $15.9 million in potential overpayments to the contractor for recoupment for the 12 months ended July 1994.
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