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A MESSAGE FROM COMPTROLLER THOMAS P. DINAPOLI New York State taxpayers support a wide array of public services, many of which are provided or overseen by State agencies and public authorities. The Office of the State Comptroller regularly performs audits of these entities’ financial and operational effectiveness. In accordance with State law, the results of these audits for the past year are summarized in this annual report. These audits play a critical part in helping keep State government accountable to taxpayers. Such accountability is more important now than ever, when tough economic times are upon us and every dime matters. Difficult decisions must be made about government programs. Information must be gathered and assessments must be made. By providing policy makers and program managers with such information and such assessments, our audits provide an important contribution to this process. Sincerely, Thomas P. DiNapoli State Comptroller The New York State Flag TABLE OF CONTENTS Introduction.............................................................................................................................. 5 Audit Summaries Health and Human Services Department of Health..................................................................................................... 9 Office of Temporary and Disability Assistance..................................................... ...
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A MESSAGEFROMCOMPTROLLERTHOMASP. DINAPOLI
New York State taxpayers support a wide array of public services, many of which are provided or overseen by State agencies and public authorities. The Office of the State Comptroller regularly performs audits of these entities’ financial and operational effectiveness. In accordance with State law, the results of these audits for the past year are summarized in this annual report. These audits play a critical part in helping keep State government accountable to taxpayers. Such accountability is more important now than ever, when tough economic times are upon us and every dime matters. Difficult decisions must be made about government programs. Information must be gathered and assessments must be made. By providing policy makers and program managers with such information and such assessments, our audits provide an important contribution to this process.
Sincerely,
Thomas P. DiNapoli State Comptroller
The New York State Flag
TABLE OFCONTENTS
Introduction.............................................................................................................................. 5 Audit Summaries Health and Human Services Department of Health ..................................................................................................... 9 Office of Temporary and Disability Assistance............................................................. 14 Office of Children and Family Services ........................................................................ 14 Office of Mental Retardation and Developmental Disabilities ...................................... 15 Office of Mental Health................................................................................................. 16 Erie County Medical Center Corporation ..................................................................... 17 Roswell Park Cancer Institute Corporation .................................................................. 17 Office of Alcoholism and Substance Abuse Services .................................................. 18 State Office for the Aging ............................................................................................. 18 Government Support Department of Civil Service.......................................................................................... 20 Department of Taxation and Finance........................................................................... 24 Office of General Services ........................................................................................... 24 Division of the Lottery................................................................................................... 25 State University Construction Fund.............................................................................. 25 Office for Technology ................................................................................................... 25 Education State Education Department ........................................................................................ 27 State University of New York ....................................................................................... 28 Higher Education Services Corporation ....................................................................... 29 Transportation New York State Thruway Authority .............................................................................. 32 New York State Canal Corporation .............................................................................. 33 Metropolitan Transportation Authority .......................................................................... 33 Central New York Regional Transportation Authority .................................................. 34 New York State Bridge Authority.................................................................................. 34 Department of Motor Vehicles...................................................................................... 35 Department of Transportation ...................................................................................... 35 Economic Development and Housing Empire State Development Corporation ...................................................................... 38 Battery Park City Authority ........................................................................................... 38 New York City Convention Center Operating Corporation........................................... 38 Development Authority of the North Country ............................................................... 39 Olympic Regional Development Authority.................................................................... 39 Roosevelt Island Operating Corporation ...................................................................... 39 Division of Housing and Community Renewal ............................................................. 39 Housing Finance Agency ............................................................................................ 40 State of New York Mortgage Agency .......................................................................... 40 Criminal Justice and Judicial Administration Department of Correctional Services ........................................................................... 42 State Commission of Correction .................................................................................. 42 Division of Parole ......................................................................................................... 42 Division of Criminal Justice Services ........................................................................... 43 State Office of Homeland Security ............................................................................... 43 Office of Court Administration ...................................................................................... 43
Other State Agencies and Public Authorities Department of Environmental Conservation ................................................................ 45 Office of Parks, Recreation and Historic Preservation ................................................. 45 Natural Heritage Trust.................................................................................................. 46 Hudson River Park Trust.............................................................................................. 46 Hudson River-Black River Regulating District.............................................................. 46 Division of Human Rights............................................................................................. 46 Banking Department .................................................................................................... 47 Insurance Department.................................................................................................. 47 Department of Agriculture and Markets ....................................................................... 47 Industrial Exhibit Authority............................................................................................ 48 Workers’ Compensation Board .................................................................................... 48 State Insurance Fund................................................................................................... 48 New York Racing Association ...................................................................................... 49 New York State Thoroughbred Breeding and Development Fund............................... 49 Agriculture and New York State Horse Breeding Development Fund.......................... 49 New York State Racing and Wagering Board .............................................................. 49 State Liquor Authority................................................................................................... 50 Department of State ..................................................................................................... 50 Division of Military and Naval Affairs............................................................................ 50 Multi-Agency ................................................................................................................ 50
The Comptroller is the chief financial officer of New York State and the administrative head of the Office of the State Comptroller, an Office established by the State Constitution. As a statewide elected official, the Comptroller is directly accountable to the taxpayers and voters of the State. Consequently, the Office of the State Comptroller is not an agency of the Executive or the Legislature, but rather of the people. This relationship makes the activities of the Office of the State Comptroller directly responsive to public concerns in a very immediate sense: the public interest is the standard of all the Comptroller's policies. An essential characteristic of the Office of the State Comptroller is its independence. This independence pertains especially to the Comptroller's role as State Auditor. It is the Comptroller who scrutinizes and reports on how State money is spent. The Comptroller's audits are central to the sound management of State government. By monitoring State operations and stressing opportunities to improve accountability and enhance productivity, the Comptroller not only fulfills a responsibility to oversee the fiscal concerns of the State, but provides the Legislative and Executive branches with an independent and objective view of how State government can operate more efficiently and effectively. By making audit reports available to the public, the Comptroller provides State taxpayers with the same independent and objective overview of State operations. The Division of State Government Accountability is a component of the Office of State and Local Government Accountability, which is the office that performs the Comptroller’s function as State Auditor. The Division is responsible for performing audits of State agencies and public authorities. In the past year, the Division issued a total of 190 audit reports addressing the operations of these entities. These reports identified more than $137 million in cost savings and an additional $32 million in unnecessary costs or payments. These audits could save State taxpayers more than $115 million, and federal taxpayers an additional $22 million, in reduced costs and increased revenues.
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Audits also result in many benefits that cannot be quantified, such as the new internal controls and management procedures that have been put into place as a result of the audits. The benefits resulting from these improvements are sometimes more significant than any quantifiable savings that are identified. The Division regularly follows up on its audits to determine whether its recommendations have been implemented. Last year, the Division found that 90 percent of its recommendations were implemented, exceeding its benchmark of 85 percent. This high rate of implementation shows that State agencies and public authorities are making critical improvements in how they operate, resulting in significant improvements in State government operations. PROTECTING THEPUBLICINTEREST The Division’s audits protect the public interest in a number of ways. For example, last year, two audits questioned the need for hundreds of millions of dollars in proposed public expenditures. In one of these audits, the Division evaluated the need for a series of planned toll increases on the New York State Thruway. The increases were expected to generate a total of about $520 million in additional revenue for the Thruway Authority between 2008 and 2012. According to Authority officials, the higher tolls were needed to cover projected cash shortfalls in Authority operations. However, our audit found other actions could be taken by the Authority to reduce its need for additional toll revenue. The Comptroller therefore urged the Authority’s Board of Directors not to approve the toll increases until it had considered the audit findings and recommendations and determined the extent to which the increases could be eliminated, reduced or postponed. The other audit examined a contractor’s progress in completing the first phase of a planned $2 billion Statewide Wireless Network for emergency communications among public safety agencies on the State, local and federal levels. Our auditors found the contractor was not meeting contract requirements, and the contract might need to be terminated in accordance with its opt-out provisions. We also performed two audits of publicly funded child care programs in New York City. One audit examined
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grants that had been awarded to child care center operators. Our auditors found that many of the operators were using grant funds inappropriately, and in some instances, fraudulently. For example, some were altering and fabricating documents to create the appearance of legitimate expenses, and some were using grant funds for personal purposes unrelated to child care. We identified a total of nearly $2.2 million in inappropriate grant expenditures, and recommended that these funds be recovered. The other audit examined the oversight of a certain type of child care provider. Our auditors found the need for significant improvement in the oversight, as they identified two providers who were registered on the New York State Sex Offender Registry, found that providers often failed to comply with health and safety requirements, and could not confirm that child care services were actually being provided by 14 of 50 randomly selected reimbursed providers. Our audits also identified overpayments of more than $20 million in the State’s Medicaid program. Medical providers incorrectly billed Medicaid for services that should not have been reimbursed, either because the services were covered by other Medicaid payments, were not eligible for reimbursement, or were not actually provided. However, the services were reimbursed, because of weaknesses in the State’s Medicaid claims processing system. Our auditors recommended improvements in the system that could prevent such overpayments in the future. In other instances, our auditors identified questionable Medicaid claims that may have been fraudulent. For example, one audit identified about $436,000 in Medicaid payments that were made to a psychiatrist who admitted to not seeing the patients. The psychiatrist sometimes billed Medicaid for more than 24 hours of treatment in a single day. Another audit identified five dentists who frequently claimed to provide Medicaid recipients with 25 or more fillings during a single office visit. Our auditors found the claims were not supported by the dentists’ medical records. We disallowed all $148,000 in audited claims and recommended that the Department of Health determine the validity of an additional $9.9 million in claims from these dentists.
Our auditors also identified a dentist who sometimes claimed to have provided Medicaid recipients with fillings in all 32 of their teeth and shortly thereafter claimed to have extracted the teeth. We disallowed all $307,000 of the dentist’s claims that we reviewed, and recommended the Department of Health review an additional $1.4 million in payments to the dentist. CONTROLLINGHEALTHINSURANCECOSTS The New York State Health Insurance Program (NYSHIP) is the nation’s largest public sector health insurance program outside the federal government, covering 1.2 million active and retired State, local government, and school district employees and their dependents, most of whom are enrolled in NYSHIP’s Empire Plan. In the 2007 calendar year, NYSHIP cost the State, the other participating public employers, and its members a total of about $5.4 billion. Until recently, our audits of NYSHIP focused on claims processing activities in the Empire Plan. As a result of these audits, millions of dollars in overpayments were identified and recovered, and improvements were made in the insurance carriers’ claims processing practices. We are continuing to perform these kinds of audits, but we have also begun to perform a different type of audit that focuses on individual medical service providers rather than general claims processing activities. This type of audit has considerable cost-saving potential, because it can focus on providers that are more likely to submit incorrect, invalid or even fraudulent claims. For example, last year we performed a series of audits focusing on certain types of providers. We found that 20 of the providers were routinely inflating the bills that were reimbursed by the Empire Plan. We recommended the Empire Plan recover the inflated portions of these reimbursements, an amount we estimated to be about $13.8 million (about 17 percent of the total $80.7 million the providers billed to Empire Plan members during the periods we audited). We also recommended action be taken to prevent such billing practices in the future. Other audits focusing on individual providers have also identified significant overpayments as well as possible fraud. It is thus clear that a focus on providers can do much to contain costs in the Empire Plan. To help promote such a focus, we are working closely with the
Empire Plan’s insurance carriers and the State agencies with oversight responsibilities in this area to develop an ongoing program of provider-based audits. ENVIRONMENTALSUSTAINABILITY Under a Green Initiative launched by Comptroller DiNapoli in September 2007, the Office of the State Comptroller is conducting audits into whether State agencies, public authorities and local governments are complying with environmental and energy requirements, investing $500 million in companies that develop clean technologies through the New York State Common Retirement Fund, and ensuring the State Comptroller’s main office at 110 State Street in Albany is a model of environmental efficiency. In the past year, the Division of State Government Accountability issued several environmentally-oriented audit reports. In particular, we issued 15 reports addressing State agency and public authority compliance with an Executive Order requiring them to begin purchasing “green cleaning and maintenance products for use in their buildings and other facilities. We found that six of the eight State agencies and six of the seven public authorities were not in compliance with the green cleaning requirements, mainly because of the State’s failure to communicate the requirements effectively. All the noncompliant entities immediately took steps towards compliance after we initiated our audits. In another audit, we examined the actions taken by the Department of Environmental Conservation in overseeing the cleanup (or abatement) of waste tire stockpiles violating existing laws and regulations. According to State law, the abatement of all noncompliant waste tire sites is to be completed by December 31, 2010. The Department is required by law to develop individual abatement schedules for each noncompliant waste tire site. However, we found the Department had not developed such schedules and, as a result, was unable to establish benchmarks for measuring the State’s progress in meeting the 2010
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goal. We also determined that little progress had been made in the abatement of two of the five largest sites in the State. Our auditors also examined the actions taken by the Department of Environmental Conservation in addressing high priority deficiencies that had been identified at 133 dams across the State. We found that many of the deficiencies had existed for years, with little remedial action by the dam owners and little or no enforcement action by the Department. For example, the Department had not inspected some of the dams as frequently as required by its inspection guidelines. We recommended actions that could be taken to improve the timeliness of corrective action on deficient dams. ANNUALREPORT As required by law, this annual report summarizes the results of all the State agency and public authority audit reports issued during the year October 1, 2007 through September 30, 2008. The audit summaries are divided into seven functional areas: Health and Human Services, Government Support, Education, Transportation, Economic Development and Housing, Criminal Justice and Judicial Administration, and Other State Agencies and Public Authorities. An accompanying volume lists, by State agency or public authority, the audit reports issued during the five-year period October 1, 2002 through September 30, 2007. The audit summaries in this annual report provide brief descriptions of the audit results and do not include the comments of the audited officials. If you are interested in knowing more about a particular report, you are encouraged to obtain and read the entire report, which includes many additional details as well as the full text of the audited officials’ response to the findings and recommendations contained in the report. You may obtain any of the reports cited in this annual report by contacting the Comptroller’s Office of Public Information at (518) 474-4015 or by visiting our website:ustetay..ncss.wwo.w.
AUDITSUMMARIES
HEALTH ANDHUMANSERVICES
THERESULTS OFAUDITS AT THE:
DEPARTMENT OFHEALTH ♦ OFFICE OFTEMPORARY ANDDISABILITYASSISTANCE ♦ OFFICE OFCHILDREN ANDFAMILYSERVICES ♦ OFFICE OFMENTALRETARDATION AND DEVELOPMENTALDISABILITIES ♦ OFFICE OFMENTALHEALTH ♦ ERIECOUNTYMEDICALCENTERCORPORATION ♦ ROSWELLPARKCANCERINSTITUTECORPORATION ♦ OFFICE OFALCOHOLISM ANDSUBSTANCE ABUSESERVICES ♦ STATEOFFICE FOR THEAGING
The Department of Health, which was appropriated almost $51 billion in the 2008-2009 fiscal year, administers New York’s Medicaid program, promotes and supervises other public health activities, and operates facilities for health research and patient care. The Office of Temporary and Disability Assistance, which was appropriated about $5.0 billion in the 2008-2009 fiscal year, provides income support and other services to able-bodied people seeking employment and people who cannot work because of temporary or permanent disability. The Office of Children and Family Services, which was appropriated about $3.8 billion in the 2008-2009 fiscal year, administers programs serving children, youths, vulnerable adults and families. The Office of Mental Retardation and Developmental Disabilities, which was appropriated about $4.5 billion in the 2008-2009 fiscal year, provides services for the developmentally disabled. The Office of Mental Health, which was appropriated about $3.7 billion in the 2008-2009 fiscal year, provides services for the mentally ill. The Office of Alcoholism and Substance Abuse Services, which was appropriated more than $770 million in the 2008-2009 fiscal year, oversees programs for preventing and treating alcohol and substance abuse. The State Office for the Aging, which was appropriated more than $250 million in the 2008-2009 fiscal year, promotes, coordinates and administers services for New Yorkers aged 60 and older. The following summarizes the results of our audits during the past year at these State agencies and other related public benefit corporations. DEPARTMENT OFHEALTH Investigation of Nursing Home Complaints -The Department of Health is responsible for investigating complaints about nursing homes. We examined whether the Department was performing these investigations in
accordance with requirements. We found that improvements were needed in the timeliness of the investigations, as some investigations were not initiated, and others were not completed, within the required timeframes. For example, 18 percent of the investigations initiated during our audit period were not initiated within the required timeframes, and 33 percent of the active investigations had not been completed within the required 180-day timeframe. We also found that the required documentation was not always maintained for the investigations. We recommended that certain actions be taken to improve the timeliness and documentation of nursing home investigations. (2006-S-87) Oversight of Adult Care Facilities - Adult care facilities provide temporary or long-term residential care to adults who are unable to live independently. The Department of Health is responsible for overseeing certain types of adult care facilities. We examined whether the Department was inspecting these facilities and investigating complaints about these facilities in accordance with requirements. We found that the Department generally completed inspections within the required timeframe. However, it did not always start inspections within the required timeframe, or issue inspection reports and investigate complaints in a timely manner, thereby delaying corrective action. We recommended certain improvements be made in the Department’s oversight of adult care facilities. (2006-S-7) Oversight of the Spinal Cord Injury Research Trust Fund -The Spinal Cord Injury Research Trust Fund was created to provide scientists, physicians, and other experts with grants for use in finding a cure for spinal cord injuries. The Trust Fund is financed by a surcharge on drivers who receive traffic tickets. From its inception in July 1998 through May 31, 2007, the Trust Fund received $63.9 million and disbursed $40.9 million. Grants are awarded by a special State
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Board within the Department of Health that was created to oversee the Trust Fund. We audited grant disbursements and found they were supported by appropriate documentation. However, we found that adequate oversight had not been provided to ensure that grant objectives were being attained. For example, we determined that the grant recipients had submitted only 44 percent of their progress reports, 60 percent of their final reports, and none of the statistical/qualitative reports or seminar documentation that was required under the grants to demonstrate their performance. We also identified delays in the grant award process that were attributed, in part, to vacancies on the Board and quorum problems from low Board member attendance. We further determined that $13.5 million had been transferred from the Trust Fund to the State’s General Fund because some of the available funding had not been awarded by the Board. (2007-S-32) Flu Pandemic Preparedness -A pandemic occurs when a novel strain of influenza emerges that has the ability to infect people. Since it is new, people have relatively low immunity to it and the virus can spread rapidly. Pandemics have occurred three times since 1900 (1918, 1957, and 1968), killing millions of people worldwide. We examined whether the Department of Health had taken steps to prepare for, and respond to, a flu pandemic, and found that the Department had taken such steps. For example, the Department had developed a written plan for responding to a flu pandemic and distributed federal grant funds to counties and hospitals for health emergency preparedness activities. (2007-S-9) Medicaid Fee-for-Service Payments for Managed Care Recipients -The Department of Health uses two methods to pay Medicaid providers: the fee-for-service method and the managed care plan method. Under the
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fee-for-service method, a provider is paid for every Medicaid eligible service rendered to the recipient. Under the managed care plan method, a managed care plan receives a monthly payment for each Medicaid recipient enrolled in the plan and is responsible for ensuring that the enrollees have access to a comprehensive range of medical services. If a Medicaid recipient is enrolled in a managed care plan, most of the eligible medical services provided to the recipient should be covered by the monthly payment to the managed care plan and only in certain specified circumstances should fee-for-service payments be made on behalf of the recipient. We audited the fee-for-service payments made over a two-year period on behalf of recipients enrolled in three downstate managed care plans. We found that about $3 million in fee-for-service payments should not have been made because the services were covered by the monthly payments to the managed care plans. The inappropriate payments were made because of delays in updating the managed care enrollment information for the recipients, most of whom were newborns whose mothers were enrolled in the three managed care plans. We recommended that the inappropriate payments be recovered and steps be taken to reduce the delays in updating managed care enrollment information. (2007-S-100) Medicaid Payments to Office of Mental Health and Office of Mental Retardation and Developmental Disabilities Providers While Recipients Were Hospitalized -Many of the clients served by the Office of Mental Health and the Office of Mental Retardation and Developmental Disabilities receive services in community-based settings. Some of these services are eligible for Medicaid reimbursement. We examined selected Medicaid payments for such services over a five-year period and identified more than $2.4 million in inappropriate payments. The payments were
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inappropriate because, in some instances, the services were not eligible for reimbursement, and in other instances, the clients were hospitalized and had not been in a community-based setting for a sufficient period of time to qualify for reimbursement. We recommended that the Department of Health recover the overpayments and develop controls to prevent such overpayments in the future. (2006-S-89) Medicaid Payments to Referred Ambulatory and Laboratory Providers While Recipients Were Hospitalized -The daily Medicaid reimbursement rates for hospitalization generally cover the costs of all medical services provided to Medicaid recipients during their hospital stays. To determine whether ambulatory and laboratory service providers were inappropriately paid for services provided to Medicaid recipients during their hospital stays, we examined selected Medicaid payments to these providers over a five-year period. We identified more than $2.3 million in inappropriate payments. We recommended that the Department of Health recover the overpayments and develop controls to prevent such overpayments in the future. We further determined that an additional $622,937 in payments could also be inappropriate. We could not make a conclusive determination because the providers were not required to report certain cost information to the Department of Health. We recommended that the providers be required to report this information. (2006-S-90) Inappropriate Medicaid Payments for Durable Medical Equipment While Recipients Resided in Nursing Homes -Charges for durable medical equipment are often included in the comprehensive Medicaid reimbursement rates for nursing homes. Accordingly, Medicaid generally should not be billed separately for these charges when such
equipment is provided to nursing home residents. However, we found Medicaid sometimes was billed separately for this equipment. During our five-year audit period, we identified about $3.1 million in potentially inappropriate payments for such equipment. We recommended that the payments be investigated, all inappropriate payments recovered, and controls improved to prevent such payments in the future. In addition, we referred certain inappropriate charges to the State Office of the Medicaid Inspector General for further review and investigation. (2007-S-18) Inappropriate Medicaid Payments for Community-Based Services While Recipients Resided in Nursing Homes -Community-based services are intended to help recipients live at home rather than in a residential health care facility, such as a nursing home. We examined selected Medicaid payments for community-based services and nursing home services over a five-year period. We identified about $2.1 million in potentially inappropriate payments for community-based services. The payments were potentially inappropriate because the recipients appeared to be residing in nursing homes at the time the community-based services were supposedly provided. We recommended that the Department of Health investigate the potential overpayments, recover all actual overpayments, and develop controls to prevent such overpayments in the future. (2006-S-106) Medicaid Payments for Pharmacy Services While Recipients Resided in Nursing Homes -Many pharmacy services are included in the comprehensive Medicaid reimbursement rates for nursing homes. Accordingly, Medicaid generally should not be billed separately for these services when they are provided to nursing home residents. However, we found Medicaid sometimes was billed separately for these services. During our five-year
audit period, we identified about $2.1 million in potentially inappropriate payments for such pharmacy services. We recommended that the payments be investigated, all inappropriate payments recovered, and controls improved to prevent such payments in the future. (2007-S-88) Medicaid Overpayments for Mental Health Services -We analyzed the claims paid by Medicaid for mental health services over a 41-month period. On the basis of our analysis, we identified certain billing patterns and other circumstances in which there appeared to be a relatively high risk of overpayments. We accordingly selected a sample of these claims for detailed examination, focusing on the claims submitted by certain service providers. Our detailed examination identified more than $1.3 million in Medicaid overpayments, many of which were the result of providers billing Medicaid more than once for the same service. About $436,000 in overpayments were made to a psychiatrist who admitted to not seeing certain patients. The patients were seen by an assistant instead (a social worker). However, the psychiatrist billed for the patients at the higher “psychiatrist billing rate, sometimes billing for more than 24 hours of treatment in a single day. We referred this matter separately to the Office of the State Attorney General for further investigation. We recommended that the Department of Health investigate and recover the overpayments we identified, and strengthen its Medicaid claims processing controls to prevent such overpayments in the future. (2006-S-53) Potential Overpayments of Medicaid Provider Claims for Human Immunodeficiency Virus (HIV) Primary Care Services -Medicaid provides an annual evaluation, periodic testing and monitoring services (primary care services) to recipients with the Human Immunodeficiency
H
Virus (HIV). These services are subject to certain frequency limits. However, when we examined the Medicaid claims submitted by clinics over a three-year period for HIV primary care services, we identified a number of instances in which these frequency limits appeared to have been exceeded. For example, in 2006, a clinic billed Medicaid for 12 annual evaluations for the same recipient. We identified a total of about $2.4 million in potential overpayments to 174 such clinics. We recommended that the Department of Health investigate the potential overpayments, recover all actual overpayments, and develop controls to prevent such overpayments in the future. (2008-S-5) Medicaid Payments for Human Immunodeficiency Virus (HIV) Drug Resistance Testing -Human Immunodeficiency Virus (HIV) drug resistance testing is used to establish more effective treatment plans for HIV infected patients who become resistant to medications used to treat the virus. In New York State’s Medicaid program, such testing is reimbursable on a fee-for-service basis up to a maximum of three tests per recipient per year. However, during our five-year audit period, we found that this maximum testing threshold was exceeded for a number of Medicaid recipients, and as a result, about $1.27 million in Medicaid overpayments were made. We recommended that the overpayments be recovered and Medicaid claims processing controls be improved to prevent such overpayments in the future. (2007-S-137) Inappropriate Medicaid Billings for Dental Restorations -We audited a sample of $148,341 in Medicaid claims submitted by five dentists. We initiated our audit because our ongoing analysis of Medicaid records indicated that the dentists often submitted questionable claims. The claims were questionable because the dentists claimed to have provided Medicaid recipients with an unusually large number of dental services, either over a period of months or in a single office visit. For example,
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on 151 different occasions, the dentists claimed to have provided a Medicaid recipient with 25 or more fillings during a single office visit. To determine whether the claims in our sample were valid and appropriate, we visited the dentists’ offices and reviewed the medical records relating to the claims. We found that all the claims in our sample were inappropriate and potentially fraudulent because they either were not supported by the dentists’ medical records or did not comply with the rules set forth in the Department of Health’s Medicaid Dental Manual. We disallowed all $148,341 in payments on these claims. In addition, because of the billing patterns identified by our audit, we recommended that the Department of Health review an additional $9.9 million in Medicaid payments to the five dentists and recover any further unsupported or inappropriate payments. We also recommended the Department implement controls that would prevent these kinds of overpayments in the future. (2007-S-71) Inappropriate Medicaid Billings for Dental Sealants -Dental sealants are applied to the biting surfaces of back teeth to prevent tooth decay. We examined selected Medicaid payments for dental sealants over a four-year period and identified about $469,300 in potentially inappropriate payments. The payments were potentially inappropriate mainly because it appeared that sealants had been applied to the same teeth more frequently than is allowed by Medicaid regulations. For example, the regulations permit the same teeth to be treated once every three years. However, we identified 354 instances in which a patient received three or more treatments on the same tooth within a three-year period. We recommended that the Department of Health investigate the potential overpayments, recover all actual overpayments, and develop controls to prevent such overpayments in the future. (2007-S-58)
