• There’s overpayments, and then there’s overpayments

    Sam Baker has a piece on The Hill Yesterday, “GOP slams $15 billion in Medicaid overpayments“:

    Medicaid has shelled out billions in overpayments to certain healthcare facilities in New York, according to a report from the House Oversight and Government Reform Committee.

    The committee, led by Rep. Darrell Issa (R-Calif.), said Medicaid has overpaid state-run facilities for people with developmental disabilities by $15 billion over the past 20 years.

    Well, first of all, no one likes this. It shouldn’t be a political issue. I think it’s ironic, therefore, that the GOP is on the attack. Unless my history is wrong, a number of those past 20 years were under GOP administrations. This wasn’t picked up until the HHS inspector general under a Democratic administration noticed it.

    We need better oversight of stuff like this. Fraud is possible, as is waste. But there’s waste and then there’s waste:

    The committee’s findings stem from a report by the Health and Human Services Department’s inspector general, which uncovered the excess payments in May. The inspector general said Medicaid is paying the New York facilities “the equivalent of” $1.9 million per patient per year, according to the GOP report.

    $1.9 million per patient per year? And they just noticed this? Not only that, but HHS uncovered it in May, and the GOP is now reacting to it in September?

    Why does anyone think they look good here. We need to do better.


    • Long term care for the DD population is really really expensive. But to put things in context, I went into the Medicaid Statistical Information System. MSIS has had issues with data reliability, and it doesn’t properly capture costs and payments for HCBS waivers (the majority of the DD population is served through waivers). However, when you roll things up to the national level, MSIS’s accuracy is tolerable.

      In 2009, institutional care for people with developmental disabilities averaged just under $128,000 per person per year across all 50 states and DC.

      That is still a *&^@ of a lot of money. It’s more than Medicare’s average cost per person, which was probably about $10,000 or a bit less in 2009 (going off memory here, this would be Parts A B and D, or all services including drugs).

      Per MSIS data, New York averaged $374,000 per person per year, the highest of all the states.

      I THINK I have heard that lot of Medicaid program integrity work is based through MSIS. If true, it’s no surprise that this problem got missed – they must be underreporting claims or something. Or over-reporting the number of beneficiaries.

      This population is very, very high-need. And the people in institutions are the most disabled of the DD population, so their needs are very, very high. Think round the clock supervision.

      Of course, the series of New York Times articles on mismanagement and abuse of residents in NY’s DD institutions is also horrifying. It’s not just excessive payments. It’s mismanagement and maltreatment of these very, very vulnerable people. Granted it is going to be very, very trying to serve them. But still, the state is failing them.

      If you want to check my numbers, MSIS is open to the public at the link below. Under SrvcType, select ICF-MR.

      The NYT series on abuse is here: