Audit addresses risk group assignment

The OIG conducted an audit of Medicaid managed care nursing facility risk group assignments.

The audit sought to determine (a) whether selected STAR+PLUS members were properly categorized in nursing facility risk groups and (b) the potential impact on capitation payments to managed care organizations (MCOs).

Nursing facility risk groups have the highest capitation rates. The audit aimed to determine whether patients were either assigned to a nursing facility risk group when they were not in a nursing home or if they were not assigned to a nursing facility risk group when they should have been.

Auditors concluded that HHS paid $1.38 million in capitation overpayments to MCOs for Medicaid recipients not eligible for managed care that reside in a Texas State Veterans Home and whose claims should be paid on a fee-for-service basis.  Auditors offered recommendations to Medicaid/Chip Services, which, if implemented, will prevent managed care capitation from being paid for fee-for-service clients and improve the accuracy of nursing facility risk group assignments and corresponding payments to MCOs in the future.

Read the report (PDF).