OIG audit finds reporting errors affected nursing facility risk group assignments

The OIG completed an audit of selected STAR+PLUS managed care members assigned to nursing facility risk groups. The audit focused on members with a discrepancy between utilization and risk group categorization for at least 12 months between March 2015 and December 2016.

Based on the results, the OIG Audit Division concluded that Texas Health and Human Services (HHS) paid $1.38 million in capitation overpayments to Medicaid managed care organizations (MCOs) for Medicaid fee-for-service recipients not eligible for managed care. Capitation payments are fixed, per member, per month amounts based on the risk group HHS assigns to an individual after considering their enrollment, eligibility, and authorization.


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The OIG concluded that weaknesses exist in the nursing facility risk group assignment process; auditors also determined that reporting errors and data inaccuracies affected risk group assignments.

The OIG Audit Division recognizes the complexity of risk group assignments, eligibility determinations, rate setting, and managed care capitation payments, including the implications of adjusting payments made to MCOs and capitation rates.

Taking into consideration these complexities, the OIG Audit Division offered recommendations to Medicaid and CHIP Services, which, if implemented, will:

• Prevent managed care capitation from being paid for fee-for-service clients.

• Improve the accuracy of nursing facility risk group assignments and corresponding payments to MCOs in the future.

HHS responses indicated it agreed with the recommendations and would take steps to recover the $1.38 million in capitation overpayments and take actions to improve the accuracy of risk group assignments.

Read the entire report (PDF).

This press release was provided by the Texas HHS Office of Inspector General