Texas makes medicaid overpayments of $40,070 - In the News - to health maintenance organizations in fiscal year 2000 - Brief Article

Healthcare Financial Management, April, 2002

The Texas Department of Human Services made overpayments of $40,070 to HMOs participating in the State of Texas Access Reform Plus (STAR PLUS) managed care program during FY00. Under the STAR PLUS program, the Texas department integrates acute health services with long-term care using a managed care delivery system for recipients residing in Harris County, Texas. An HHS audit uncovered the payment errors, which resulted from incorrect risk-group assignments for eligible STAR PLUS members.

Reasons for the payment errors included the following:

* A programming requirement was not met to implement the 120-day delay for HMO members who upgrade to a higher payment risk group.

* Information used to determine whether the member was in the nursing-facility or the community-based-alternatives risk group was not always updated in a timely manner, and when it was updated, it overrode the prior base plan value.

* Medicare eligibility was not always recognized in determining risk-group assignment.

* The prospective payment system made untimely payment adjustments due to the Texas department's limitation of applying automated retroactive adjustments to only the prior seven months. Necessary adjustments outside this seven-month period require manual entries and are identified through annual audits conducted by the Texas department.

HHS anticipates a significant increase in payment errors as the STAR PLUS program expands to other Texas counties.