Earlier this month we discussed the revelation that the federal Medicaid program paid New York State nearly $700 million more than it should have over the course of three years (2006-2009). The overpayment was not spurred by any misconduct but was instead a glitch that federal, state, and local officials did not catch in reimbursement rates for nursing home residents participating in the New York Medicaid system.
The New York elder law attorneys at our firm work with local residents on Medicaid issues and appreciate the immense complexity of the system. Our state is notorious for its tricky reimbursement rules. That complexity apparently led to the prolonged oversight in this case.
After the mistake was uncovered federal officials stated that they did not plan on trying to recoup those funds–a step which would present extreme challenges for officials trying to control Medicaid costs.
However, a new report from Mid Hudson News suggests that many local counties may actually be penalized for part of the overpayment. For example, the Ulster County Legislature Ways and Means Committee learned this week that federal officials may actually disallow $2.5 million in Medicaid payments that were already made. The federal government intends to recoup those payments over a six week period. The county’s received roughly $10.4 million in total overpayments as a result of the nursing home reimbursement problem.
The New York Congressional delegation wrote to CMS urging it to reconsider its decision, but insiders admit that it is unlikely that it will make any difference.
County officials were surprised by the federal demand, because the mistake had nothing to do with the county or the state. The main issue was a switch in methodology for timing purposes by the Center for Medicare and Medicaid Services. The change altered the way timing calculations were made in the state since the beginning of the program. It is unclear how the changes will affect other counties, however it is likely that all local government will feel a pinch. Early data suggests Ulster, Sullivan, Westchester, and Erie counties will suffer the most from the forced payback of the Medicaid payments.
It is yet unclear what this means for local residents on the New York Medicaid program. More than likely many counties will have budget shortfalls for a few years as they try to dig their way out of the hole created by being forced to pay millions more than expected back to the federal government.
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