December 10, 2016

New York State Comptroller Thomas P. DiNapoli announced the following audits and reports were issued during the week ending December 10, 2016

New York State Comptroller Thomas P. DiNapoli announced the following audits and reports were issued during the week ending December 10, 2016 
Source: Office of the State Comptroller

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State Comptroller’s auditors find flaws allowed $16.6 million in inappropriate payments to home health care providers

The New York State Department of Health (DOH) erroneously made $16.6 million in Medicaid payments to 95 home health providers over a 3 1/2-year period, largely because the agency mistakenly paid for more days of care than what was provided, according to an audit released by New York State Comptroller Thomas P. DiNapoli.

“Home health care providers fill a great need by allowing patients to stay in their homes and avoid costly placement in hospitals or rehabilitation centers,” DiNapoli said. “However, my auditors found numerous instances where the state Department of Health’s eMedNY billing system paid providers for weeks of service, when only days of care had been given.”

In 2012, as part of its Medicaid redesign program, DOH implemented an Episodic Payment System (EPS) to reimburse certified home health agencies (CHHA) for health care services provided to Medicaid recipients in their homes. CHHAs provide various services including long-term nursing services, home health aide services, physical therapy, social work and nutrition services.

The payment system is based on 60-day episodes of care. CHHAs can be paid for a full episode or may receive pro-rated payments based on the number of days of care on the claim.

For the period
May 1, 2012 through Dec. 31, 2015, DiNapoli’s auditors identified about $16.6 million in improper Medicaid payments to 95 CHHAs. About 93 percent ($15.4 million) of the overpayments went to 20 CHHAs.

Auditors found $8.2 million in overpayments to CHHAs for recipients who were transferred into Managed Long Term Care (MLTC) during a 60-day episode of care. The CHHAs should have received pro-rated payments for the partial episodes of care. For example, one CHHA received a full payment of $11,607 for a recipient who received home health services for only four days, leading to an overpayment of $10,833.
Approximately $7.1 million in overpayments were made to CHHAs that improperly billed multiple episodes for the same recipient within 60 days of the recipient’s original episode start date.

Another $1.3 million in overpayments went to CHHAs that improperly received full 60-day payments for recipients who subsequently obtained services from a different CHHA within an episode of care. For example, a CHHA was paid $10,979 (a full 60-day payment) for ten days of services. Five days later, the recipient then received services from a different CHHA, which received $4,202 for 56 days of services. The first CHHA should only have received a pro-rated payment amount of $1,830 for the 10 days.

DiNapoli’s auditors determined DOH has not established eMedNY system controls to prevent the improper payments they identified. The issues found by auditors were raised by DOH employees during the construction of the EPS. However, insufficient resources and the EPS billing configuration prevented the development of effective eMedNY system controls to prevent the overpayments, according to DOH officials.

DiNapoli recommended DOH:

• Review the $16.6 million in improper payments made to CHHAs and recover overpayments, as appropriate, and ensure prompt attention is paid to those providers that received the largest dollar amounts of overpayments; and

Develop and implement mechanisms to identify and recover overpayments when CHHAs do not bill according to DOH guidelines.

DOH officials concurred with the audit recommendations and indicated actions will be taken to address them. Their full response is included in the complete audit.

Municipal Audit Reports

After a referral from Steuben County District Attorney Brooks Baker, auditors found that controls were not adequate to ensure that financial activity was properly recorded and reported and that moneys were safeguarded. As a result, it appears the treasurer was able to misappropriate approximately $8,500 from January 1, 2014 through May 31, 2015. In addition, there was a shortage of $490 in bell jar proceeds that were controlled by the president without detection by company officials.

Town officials have allocated sufficient resources to properly maintain the town’s roads. However, they have not allocated sufficient resources for future highway equipment needs. The capital plan should incorporate the board’s decisions about when equipment should be replaced and whether to accumulate funds for replacement in reserves or take advantage of current low interest rates to finance acquisitions.

NYSDOL does not have the necessary information to monitor county jail inmate populations effectively for inappropriate unemployment insurance benefit payments. Auditors found inmate data used was incomplete 28 percent of the time for county jail inmates outside of New York City and 55 percent of the time for city inmates. In addition, NYSDOL did not receive data from each county in each biweekly data file. Finally, while NYSDOL performs a data match on a biweekly basis for county jail inmates outside of New York City, payments of benefits are made weekly, allowing inappropriate payments to occur prior to the match.

The board should improve its oversight of the department’s fiscal activities and the safeguarding of its resources. The bylaws do not adequately segregate the treasurer’s duties. They require the treasurer to receive all department moneys, pay all bills and report the department’s financial status at regular department meetings; however, they do not provide for mitigating controls such as someone other than the treasurer reviewing and reconciling the bank accounts.

The board, as a whole, did not audit any claims during the audit period. Instead, each quarter, it designated a single trustee to audit all claims, after which the board, as a whole, reviewed and approved the abstracts by resolution. Any board member other than the trustee designated as claims auditor could request to review individual claims if there were questions about an unfamiliar vendors or unusual claim amounts on the abstracts; however, this did not often occur. A review of 30 claims totaling $147,624 disclosed that the designated trustee did not perform a thorough audit of claims. As a result, eight claims totaling $1,791 did not contain sufficient supporting documentation.

The department’s procedures for prorating property tax exemptions on transfers of property, correcting property tax exemption errors and inputting tax exemption income limits were effective.


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