The U.S. Department of Health and Human Services Office of the Inspector General just published an audit report this week that Texas paid out incorrectly $922,557 in CHIP payments to Medicaid managed care organizations.
Now a million dollars in the grand scheme of the 2020-2021 Texas Medicaid budget at some $66 billion is pretty small potatoes.
Multiple capitation payments for same individuals
But the interesting thing is that the feds discovered what Texas or the MCOs had not -- these were improper capitation payments made in the same month for 572 individuals who had more than one identification number plus 27 more who were different individuals.
Audit period over three years
The audit covered from January 1, 2016 to October 31, 2019. Barring this audit, the problem would have continued totally undetected by Texas HHS or the MCOs.
Monthly capitation paid regardless of whether or not a healthcare service is performed
According to the audit report, under Texas CHIP, the State agency pays MCOs a monthly fee, known as a capitation payment, to ensure that each enrolled beneficiary has access to a comprehensive range of medical services. A capitation payment is “a payment the State [agency] makes periodically to a contractor on behalf of each beneficiary enrolled under a contract for the provision of medical services under the State plan. The State [agency] makes the payment regardless of whether the particular beneficiary receives services during the period covered by the payment.”
The state had actually paid the MCOs $1,921,396, twice what should have been paid. As the federal share of this amount was $1.783,669, the state owes $856,456. The state is disputing this amount.
Texas HHS attributes the unallowable payments to "eligibility worker and system errors."
The full report is available below:62010003