Tuesday, September 17, 2013

Maryland Developmental Disability Admin Owes Federal Govt $21 million


Maryland’s Developmental Disability Administration improperly claimed nearly $21 million in costs for a program designed to assist with home healthcare costs for the developmentally disabled.  According to a report in the Baltimore Sun, the agency overbilled Medicaid for room and board costs unallowable under the Community Pathways waiver program.

The U.S. Department of Health and Human Services conducted an audit after receiving an allegation of that the DDA was claiming unallowable costs.

The audit found that DDA lacked internal controls to ensure unallowable costs were not included for provider payments. 

Auditors sampled 100 claims and found that only 5 complied with state and federal regulations—a 95 percent error rate.

Of the 100 claim lines that we sampled, 5 complied with Federal and State requirements; however, 95 did not. The 95 claim lines had 135 errors. For 81 claim lines, the State agency included unallowable costs for room and board. For 54 claim lines, the State agency reduced provider payments to reflect amounts in excess of room and board that providers had collected from beneficiaries but did not reduce claims for Federal reimbursement accordingly. Forty claim lines included both errors. (Fourteen claim lines, with service dates after December 2011, had errors related only to excess beneficiary payments.) We estimate that, as a result of these errors, the State agency claimed at least $20,627,705 (Federal share) in unallowable costs.

Federal auditors recommended the MDHMH refund the $21 million in improperly claimed cost. 

It is unclear exactly how DDA will repay the funds.  “We are in discussions with our budget office and the federal government about repayment options,” said acting DDA Executive Director, Patrick Dooley.

Larry Hogan, founder of the grassroots organization Change Maryland, told the Baltimore Sun,  “it puts the Maryland taxpayer on the hook for $20 million, its disgraceful.” 

The DDA has been heavily criticized over the last several years.  A scathing 2009 legislative audit found that 14 deficiencies including failure to seek $3 million in federal funds, $3.6 million in overpayments to care providers and, payments to contractors for services provided to dead people. 

In 2011 it was revealed that the agency left $38 million unspent, including $12 million in Medicaid funds, between 2009-2011.  The funds went unspent with thousands on its waiting list for assistance.   Disclosure of these unspent funds came months after the state legislature raised the sales tax on alcohol from 6 percent to nine percent in order to increase funding for the developmentally disabled.

This latest audit adds to the list of negative reports showing mismanagement, incompetence, and in some cases outright corruption in the administration of Governor Martin O’Malley. 

It calls into question the virtues of StateStat, O’Malley’s much ballyhooed performance management system.  O’Malley touts the program as a sign of his competence as a technocratic manager.  Yet, like the failure to track contraband cell phones at the Baltimore Detention Center—which the head of violent gang used to conduct criminal activity from inside the jail—StateStat was not measuring DDA’s performance on properly filing claims. 

In fact, a review of StateStat reports dating back to 2009 shows that the Governor’s Delivery Unit was solely focused on reducing the agencies waiting list, and no other aspect of DDA’s operations. 

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