Healthcare providers banned from Medicaid may have been reimbursed $213 million in federal money, thanks to a state agency oversight, a government watchdog reported.
Valid identification numbers — identifiers that ensure providers are eligible for Medicaid reimbursements — were missing from 800,000 Colorado claims in 2011, the U.S. Department of Health and Human Services inspector general reported Wednesday.
The state reimbursed the providers $424.4 million for the claims, of which, $213 million was federal money.
“Medicaid claims submitted for reimbursement that do not have [identification numbers] are thus more vulnerable to improper payments,” the report said. “In fact, it is possible that the state agency paid claims that had been submitted by federally banned providers.”
Federal law requires that Medicaid claims must include valid identification numbers. Providers can be banned for reasons such as committing fraud.
Investigators reported that more than 798,000 of the 2011 claims totaling at least $212.1 million in federal money were missing identification numbers. Another 4,700 claims totaling about half a million dollars in federal money had identification numbers that did not match any provider.
The providers were reimbursed because Colorado’s claims processing software didn’t alert officials of invalid or missing identification numbers, the inspector general found.
“As a result, the state agency was unable to prevent the reimbursement of Medicaid claims that had missing or invalid” identification numbers, the report said. “These control weaknesses threaten the integrity, effectiveness and efficiency of the Medicaid programs.”
The problem wasn’t corrected, despite a Centers for Medicare and Medicaid Services letter that told states in 2006 to ensure that providers were identified before reimbursement. Also, Colorado spent $2.1 million, 90 percent of which was from federal funding, on software upgrades in 2007 that didn’t address the issue.
Also, the inspector general reported in 2012 that Colorado reimbursed healthcare providers that weren’t allowed to participate in Medicaid because the state didn’t use identification numbers.
Without valid identifiers, investigators couldn’t determine whether or not any banned providers were reimbursed. Consequently, the inspector general couldn’t recommend Colorado recover any money.
Colorado officials told investigators the agency is now denying claims with invalid or missing numbers, but will not have its software updated until November 2016.
