NC DMA Refutes OIG’s Claims of Incorrect Claims Processing

By Leah Paraschiv, NCMGMA Medicaid Committee Chair

In March, the Office of Inspector General released a report stating that the North Carolina Division of Medical Assistance did not always use the correct Federal medical assistance percentages (FMAPs) when processing claim adjustments reported to the Centers for Medicare & Medicaid Services. Of the 9.2 million claims that were reviewed in the course of the audit, the OIG stated that DMA processed 1.9 million claims using incorrect FMAPs resulting in no impact. However, the remaining 7.3 million claims were alleged to have been paid using incorrect FMAPs resulting in a net overpayment and as a result received $1.6 million (Federal share) more in Federal reimbursement than it was entitled to. The scope of the OIG’s audit included claims originally paid from November 2003 through June 2013 and subsequently adjusted from July 2008 through June 2013, prior to the implementation of the current claims adjudication system (NCTracks).

The OIG subsequently recommended that DMA refund $1.6 million to the federal government. In response to the OIG’s report, the NC Division of Medical Assistance asserted that the FMAP continues to be correctly applied to the claim adjustments and the adjustments are being reported correctly. The State agency maintained that it collaborated with CMS on its policies and procedures (used for several years) for applying the appropriate FMAP to claim adjustments and that CMS revalidated them as part of the implementation of North Carolina’s new Medicaid Management Information System in July 2013.

In written comments on the report, the NC Division of Medical Assistance disagreed with the OIG’s findings. DMA asserted that the FMAP continues to be correctly applied to the claim adjustments and the adjustments are being reported correctly, and maintained that it collaborated with CMS on its policies and procedures (used for several years) for applying the appropriate FMAP to claim adjustments and that CMS revalidated them as part of the implementation of North Carolina’s new MMIS in July 2013. This week, members of DMA’s financial team reiterated that they strongly disputes OIG’s findings. DMA anticipates that OIG will forward its finding to CMS for its consideration; however, DMA has already received assurance from CMS that the matter will not be pursued. DMA has assured that providers will not experience any overpayment recovery or claims reprocessing activities resulting from this audit.

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