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Arkansas Slips Up on Supplemental Medicaid Payments

Insufficient oversight led Arkansas to make millions in inaccurate and ineligible supplemental Medicaid payments.

Lack of oversight led Arkansas to improperly make Medicaid payments

Source: Thinkstock

By Thomas Beaton

- A lack of administrative oversight led Arkansas to miss supplemental Medicaid payments, make several payments to Medicaid-ineligible providers, and receive excess Medicaid dollars, found a report from the Office of the Inspector General (OIG).

OIG reviewed a total $73.1 million claimed by the Arkansas Department of Health and Human Services (HHS) to pay Medicaid eligible providers, and found that the state received an excess of $7.1 million from the Federal Share.

As states continue to pursue Medicaid innovation in the form of 1115 waivers, federal organizations have to ensure that states remain compliant with how they pay their providers.

“Each State administers its Medicaid program in accordance with a CMS-approved state plan,” OIG said. “Although the state has considerable flexibility in designing and operating its Medicaid program, it must comply with applicable Federal requirements.”

Arkansas failed to meet some of these criteria, OIG noted.  Out of 120 supplemental payments, only 16 payments were paid in accordance with federal guidelines. The state incorrectly calculated the amount of 88 of the remaining 104 supplemental payments.

Many of these payments were processed with outdated Medicaid reimbursement codes that led to unwarranted provider reimbursement, and caused providers that did not have Medicaid-eligible services to receive Medicaid dollars. 

“Federal regulations required states to make payments to providers who self-attest to specializing in family medicine, general internal medicine, or pediatric medicine or a subspecialty recognized by one of the specified professional associations, and further attest that they are board certified in that specialty or subspecialty and/or that at least 60 percent of all Medicaid codes billed by the provider during the prior calendar year were for specified code,” OIG said.

Because the Arkansas state Medicaid program used outdated coding and a non-compliant definition of Medicaid provider-eligibility, payments and Medicaid spending fluctuated. 

“For example, one provider received a supplemental payment of $52,795, but only 55 percent of the provider’s Medicaid claims in the previous year were for eligible codes. Another provider received a supplemental payment of $529 despite only 28 percent of that provider’s Medicaid claims being for eligible codes in the previous year,” OIG said.

Three providers who attested to being board certified in certain specialties were actually certified in an ineligible specialty, the report added.  Thirteen providers who attested to meeting the Medicaid 60 percent threshold failed to do so, yet received close to $190,000 in supplemental payments.

OIG concluded by suggesting that the state of Arkansas immediately recover and pay the federal government a large portion of the excess dollar amount from the Federal Share.

“We recommend that the State agency refund $3,007,734 to the Federal Government for the Federal share associated with the inappropriate supplemental payments.”

In a response letter attached to the report, the state government of Arkansas agreed with OIG’s findings and said they are willing to work towards modifying how the state pays Medicaid providers.


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