Auditors Find State Erroneously Charged Feds $3.4 Million

State auditors have discovered the state of Connecticut erroneously submitted more than $3.4 million in Medicaid claims for partial federal reimbursement and must reimburse the government at least half that.

In a letter the Auditors of Public Health sent Monday to Gov. Dannel Malloy, the Democratic and Republican auditors said claims for the federal reimbursement were made after patients had been discharged from the Albert J. Solnit Psychiatric Center in East Windsor last year. The facility provides treatment and residential care to children with severe mental illness and other behavioral problems.

The auditors conduct a review of the state departments every two years and one claim in a random sample of claims for the fiscal year ending on June 30, 2012 that caused concern. It was a $1,920 claim for a patient who had been discharged before the date on that claim.

And that was just the beginning. The audit went on to find 17 additional claims totaling $145,920 for the patient, all filed after the patient had been released, according to a letter that the auditors sent to Malloy on Monday. 

Further review revealed 20 more claims for eight patients totaling almost $1.1 million, all filed when patients were not admitted, according to the letter.

The Department of Administrative Services Collection Services Division, which does billing and collecting on behalf of state agencies, agreed with the auditors findings and found 55 additional monthly claims that needed to be adjusted.

Among them were more than $1 million in claims between January 2006 and January 2009 for a patient who had been discharged from the Solnit center in 2005, the letter states.

In total, the amount of the claims believed to have been erroneously submitted for federal reimbursement is $3.4 million. Because the federal government reimburses at least 50 percent of the claims, at least $1.7 million will be returned to the federal government through credits against subsequent claims.

The problem, auditors found, was that the system in place continued to bill for patients when they would leave for a few days or when they were discharged, Robert Ward, auditor of public accounts said.

Department of Administrative Services staff told auditors that the system continually claims federal reimbursement for patients if the date a patient was discharged is not manually entered into the system.

Auditors also found that the Department of Administrative Services did not have a system in place to spot the errors.