September 2007

Tennessee Home & Community-Based Mental Retardation Services for July 1, 2002, Through June 30, 2003

The federal Department of Health and Human Services' Office of Inspector General (OIG) evaluated whether the Tennessee State Medicaid agency claimed federal repayments for Home and Community-Based Services (HCBS) that were properly supported in providers records and to ensure that they were administered properly in relation to each clients approved plan of care. The OIG sampled 200 claims and found 38 claims for unallowable services equaling nearly $43,000 a majority of which were for services that were billed at a higher level of care than was provided.

OIG said that the state Medicaid agency did not ensure that these costs were allowable before seeking federal reimbursement. The OIG also found that the agency's Division of Mental Retardation Services (DMRS) billing system did not allow for unplanned changes in services. The DMRS also did not have any system for ensuring that the services billed were in fact provided.

The OIG recommended in the report that the DMRS establish these controls. The OIG recommended that the agency refund the excess to the Centers for Medicare and Medicaid Services and implement several new controls to prevent any further miscalculations.