The state Department of Health and Human Services agreed to a weakened contract with a company reviewing Medicaid claims for durable medical equipment, which the federal government warned are at high risk for fraud.
The state has contracts with two companies to review Medicaid claims for medical items such as wheelchairs and hospital beds before and after claims are paid. The state spent about $170 million on Medicaid claims for such equipment in 2015, according to the state audit released Monday.
The state signed a contract with Public Consulting Group for post-payment reviews that omitted accuracy standards and penalties for failure to meet performance targets the audit said. DHHS had discovered problems with company’s claim reviews before awarding the company a new contract in 2013, the audit said. DHHS did not review the company’s work, increasing the risk that poor performance would not be identified.
The Carolina’s Center for Medical Excellence has a contract to perform prepayment reviews. The company reviews and reports on its own performance. The state does not perform its own reviews, the audit said.
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In its formal response, DHHS agreed with the audit findings. The agency has been reviewing the PCG contract since December, and sees opportunities for strengthening performance measures, DHHS Secretary Rick Brajer said in the response.
DHHS has developed a way to review prepayment cases. A view of cases from October though December 2015 resulted in an accuracy rating of greater than 95 percent. Brajer wrote.