Maine Medicaid Overpays Millions of Dollars for Lab Services

Maine did not follow federal guidelines and state policies resulting in overpayments of $3.49 million for 355,358 hospital outpatient and independent laboratory services from 2007 through 2010, according to a March 5 audit report by the Department of Health and Human Services Office of the Inspector General (OIG). The federal government is seeking a $2,538,406 refund from the state representing the federal share of the overpayment amount. There is no mention in the OIG audit report or the state’s response of any action directed against laboratory providers who were overpaid because of the state’s errors.  The OIG says it conducted the audit because previous OIG reviews found that some states have made payment errors by claiming reimbursement for clinical diagnostic laboratory services that were not in accordance with federal and state requirements. Federal regulations require that states do not pay more than Medicare for lab services. Maine changed its policy for Medicaid payments on March 29, 2009, for in-state laboratories to allow only 53 percent of the Medicare payment amount for Maine. The policy does not apply to out-of-state providers. In its official written response to the audit report, Maine neither agreed nor disagreed with the OIG report and said it will not refund any money to the federal government until the conclusion of discussions between CMS  and the OIG. The response also says Maine is no longer overpaying for lab services and that it will develop a corrective action plan to prevent future overpayments. No specifics of the corrective action were provided.