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Wisconsin Physicians Service Insurance Corporation Received Nearly $3 Million in Disproportionate Share Hospital Overpayments

July 5, 2017

Federal requirements dictate that proper claims on Medicaid patient days by verified by providers for Medicaid eligibility for each patient day with the State. In the state of Missouri, providers submit Medicaid patient days on the Medicare cost report for Medicare disproportionate share hospital (DSH) payments to Wisconsin Physicians Service Insurance Corporation (WPS), the state’s Medicare contractor.

Following a review, the Office of Inspector General (OIG) found that WPS did not adequately settle fiscal years 2010 through 2012 according to Federal requirements. The OIG found 10 selected providers with 20 cost reports improperly claimed 7,132 Medicaid patient days on their Medicare cost reports resulting in DSH overpayments of nearly $3 million.

The nature of the improper claims include unallowable and unsupported patient days dictated by Federal requirements and guidelines. The claims on excluded services that were submitted and not properly reconciled by WPS include categories of family planning and family planning-related services, the Childrens’ Health Insurance Program, temporary prenatal care services, State-only programs, patients who did not meet the designated spenddown requirements to qualify for spenddown programs, and dual eligibility.

The errors are due to selected providers not properly claiming Medicaid patient days because they didn’t understand the Federal requirements and therefore prepared and submitted improper cost reports to WPS. WPS has committed to communicate with the Missouri State Medicaid agency to stay current on the latest eligibility information and be accountable to educate providers regarding the categories that are excluded from Medicaid programs within the purview of medicare DSH payments.

The OIG recommended that WPS recover the $3 million in DSH overpayments, which WPS agreed to. The OIG also recommended that WPS reopen and revise settlement cost reports from Missouri providers that were not reviewed by the OIG. WPS rejected this recommendation stating that its limited resources prevents the detailed auditing required to comply with this recommendation to which the OIG sustains its logic and believes that findings of the audit would uncover the potential of significant recovery of Medicare funds which would more than cover the expense.

Susen Sawatzki Written by Susen Sawatzki
Healthcare Industry Expert
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