S'ERV1CEs 
Office of Inspector General 
(~" ~~~ ~D:E:P	 ARTMENT OF HEALTH & HUMA SERVICES

Washington, D.C. 20201 
OCT - 9 2008
 
TO:	  David Fran 
Director of Medicaid Integrity Group 
C~enter1s for lMeJdica~re &  Medicaid Services
FROM:  Stuar Wright 0 -,, 
Deputy Inspector General 
for Evaluation and Inspections 
SUBJECT:	  Memorandum Report: "Medicaid-Funded Personal Care Services in 
Excess of24 Hours per Day," OEI-07-06-00621 
hours 
This memorandum report provides the results of our analysis of 	 the total number of 
biled for Medicaid-fuded personal care services (PCS) in five States. Our objective 
was to fuher examine the extent to which PCS claims may be vulnerable to payment
 
errors because of biling practices identified in a related evaluation. To perform our 
analysis, we used claims data collected for the Office ofInspector General (DIG) 
evaluation entitled "Payments Made in Error for Personal Care Services During 
Institutional Stays" (OEl -07 -06-00620). 
That evaluation determined the extent to which five States made Medicaid payments for 
PCS during periods of beneficiar institutionalization and was focused on beneficiaries 
with overlapping institutional and PCS claims. We identified some payments made in 
error because the number ofPCS hours paid exceeded 24 hours per day. We therefore 
examined all paid PCS claims in the five States for those claims that included biling for 
units of services in excess of24 hours per day, irrespective of other services that 
beneficiaries were receiving (e.g., institutional services). 
We found 871 paid claims for PCS that were biled in excess of24 hours per day in four 
of the five States, indicating possible payment errors that may not have been identified by 
existing State controls. In addition, we found many other claims for PCS that totaled or 
nearly totaled 24 hours per day. 
BACKGROUND 
Medicaid Personal Care Services 
PCS are provided to the elderly, individuals with disabilities, and individuals with 
chronic or temporary conditions to assist them to remain in the community. The "State 
OEI-07-06-00621  Medicaid-Funded Personal Care Services in Excess of24 Hours per Day  Page 2  David Frank 
Medicaid Manual describes PCS as assistance relating to eating, bathing, dressing, 
toileting, transferring, maintaining continence, personal hygiene, light housework, 
laundry, meal preparation, transportation, grocery shopping, using the telephone, 
medication management, and money management.1    
States may provide PCS to eligible Medicaid beneficiaries through State plan and waiver 
programs, or through a combination of both. States that provide PCS through a State 
plan program must conform to the general Medicaid program requirements outlined in 
section 1902 of the Social Security Act. States have also provided PCS through 
section 1115 demonstrations and through section 1915(c) Home and Community-Based 
Services waiver programs. 
 
State Medicaid programs are providing personal care and other home- and 
community-based services to an ever-increasing number of Medicaid beneficiaries in 
efforts to contain Medicaid spending and avoid beneficiary institutionalization.  State and 
Federal Medicaid expenditures for PCS reached $9.4 billion in 2005, an increase of 
56 percent over 3 years.2  The Congressional Budget Office (CBO) estimates that by 
2015, States with about a quarter of Medicaid enrollment will use provisions of the  
Deficit Reduction Act of 2005 to extend personal care and other home- and 
community-based services to an additional 120,000 beneficiaries.3  
 
Section 1902(a)(30)(A) of the Social Security Act and 42 CFR 447.200 require States to 
ensure that Medicaid payments are consistent with efficiency, economy, and quality of 
care standards. Billing practices that may result in undetected overpayments for PCS are 
not consistent with these requirements and represent a potential source of vulnerability 
for payment errors.     
 
METHODOLOGY 
 
For our evaluation entitled Payments Made in Error for Personal Care Services During  
Institutional Stays (OEI-07-06-00620), we collected Medicaid claims data from five 
States for PCS provided from October 1 through December 31, 2005.  The five States are 
Minnesota, New Mexico, North Carolina, Texas, and Washington.  We used these data to 
conduct this analysis. 
 
Identification of Paid Personal Care Services Claims in Excess of 24 Hours per Day 
To identify claims in which providers billed Medicaid for more than 24 hours of PCS in a 
day, we first determined the number of days covered by each claim.  We then multiplied 
the maximum number of billing units possible in a 24-hour period by the number of days  
                                                 
1 The State Medicaid Manual, Pub.  No. 45,  4480(C).  Available online at 

http://www.cms.hhs.gov/manuals/downloads/P45_04.zip.  Accessed on January 16, 2008. 
 
2  Centers for Medicare  &  Medicaid Services (CMS), CMS-64 summary data for 2002 and 2005. 
 
3  CBO memorandum, Additional Information on CBOs Estimate for the Medicaid Provisions in the Conference Agreement for 

S. 1932, the Deficit Reduction Act of 2005.  January 31, 2006.  Available online at 
http://www.cbo.gov/ftpdocs/70xx/doc7033/s1932medic.pdf.  Accessed April 16, 2008.    
OEI-07-06-00621        Medicaid-Funded Personal Care Services in Excess of 24 Hours per Day 
  Page 3  David Frank 
covered by each claim.  If a claim covered 3 days and the services were billed in 
15-minute units, the maximum number of units possible during that timeframe would be 
288 (96 units per day times 3 days).  More than 288 units paid through this claim would  
result in more than 24 hours of services per day.  If a beneficiary had multiple claims for 
PCS with the same date(s) of service, we combined the units billed on all claims with the 
same date(s) to determine the total number of units billed.4  We then identified all claims  
for which the total hours of services paid exceeded the maximum number of hours 
possible for the day(s) included in the range of days covered by the claim.  PCS claims 
are generally billed in date ranges. Although some States require that PCS be provided 
on every day included in the date range, other States allow the date ranges to include days 
on which no services were provided.  Because of this practice, our analysis provides a 
conservative estimate of claims paid in error in the five States studied. 
 
Limitations  
This analysis was conducted as part of an effort to identify future OIG work.  Therefore, 
we used available data rather than requesting updated or additional data from the States 
or the Centers for Medicare & Medicaid Services.  The data we used did not include 
per-unit payment rates for PCS.  Without this information, we are unable to determine the 
expenditures for services billed in excess of 24 hours per day. 
 
Beneficiaries with serious medical conditions or exceptional needs may require many 
hours of PCS per day and/or multiple PCS attendants, resulting in more than 24 hours of 
services per day.  Therefore, it is possible that claims billing for services in excess of  
24 hours per day were paid appropriately. However, these situations would be rare, and 
without conducting further review, we cannot determine the accuracy of these payments.   
 
Standards 
This study was conducted in accordance with the Quality Standards for Inspections 
issued by the Presidents Council on Integrity and Efficiency and the Executive Council 
on Integrity and Efficiency. 
 
RESULTS 
  
In One Quarter, State Medicaid Programs in the Five States Reviewed Paid 
871 Claims for PCS That Billed in Excess of 24 Hours per Day  
In four of the five States, Medicaid paid 871 PCS claims that billed in excess of 24 hours 
of services per day from October 1 through December 31, 2005.  We did not have 
sufficient information to determine how much of the $873,132 associated with these 
claims was for services billed in excess of 24 hours of services per day.  However, 
22 percent of the total hours paid for these claims were in excess of the maximum  
number of hours possible during the period covered by the claim.  Although it is possible 
that these claims were paid appropriately, without conducting further review, we cannot 
determine the accuracy of these payments.  Table 1 provides an overview of the claims  
                                                 
4  To ensure the accuracy of our analysis, we limited the  analysis to claims  for PCS billed in units of 15 minutes or 1 hour.  Claims  
billed in units of 1 or more days were  excluded from our analysis.  Some State Medicaid programs pay PCS in daily or monthly units, 
but the use of such units does not necessarily mean that PCS were provided every hour of that day or month.  Rather, the provider is 
paid a fee for services needed on the day or in the month billed, regardless of the hours of service that were provided.   
OEI-07-06-00621        Medicaid-Funded Personal Care Services in Excess of 24 Hours per Day 
  Page 4  David Frank 
identified and Medicaid payments for PCS claims that billed in excess of 24 hours per 
day. 
 
Table 1:  Medicaid Claims  for PCS That Billed in Excess of 24 Hours per Day 
 
State  PCS Claims for Services From  October 1 Through December 31, 2005, in Five States 
Number  Total Paid Hours for  Hours in Excess of  Percentage of Hours 
  Amount Paid 
of Claims  These Claims  Maximum Possible  in Excess of Maximum 
Minnesota  273  $507,129  35,751  4,431  13% 
New Mexico  173  $115,795  6,244  1,852  30% 
North Carolina  0  0  0  0  0 
Texas  263  $190,620  18,327  7,360  40% 
Washington  162  $59,588  6,940  1,420  20%
     Total  871  $873,132  67,262  15,063  22% 
Source:  OIG analysis of Medicaid Management Information System claims  data, 2008. 
 
To further explore potential vulnerabilities present in Medicaid PCS claims, we also 
examined claims that billed high hours per day but did not exceed the maximum possible 
hours. In the five States, Medicaid paid 2,324 PCS claims that billed between 16 and 
24 hours of services per day from October 1 through December 31, 2005.  These claims 
represent an additional $3,014,389 in potentially inappropriate payments.   Table 2 
provides an overview of the claims identified and Medicaid payments for PCS claims that 
billed between 16 and 24 hours per day. 
 
Table 2:  Medicaid Claims for PCS That Billed Between 16 and 24 Hours per 
Day 
 
PCS Claims for Services  From October 1 Through 
State 
December 31, 2005, in Five States 
   Number of Claimsi  Amount Paidi 
 Minnesota  1,767i  $2,708,499i 
 New Mexico  160i  $96,162i 
 North Carolina  36i  $6,219i 
 Texas   83i  $49,874i 
 Washington  278i  $153,635i 
     Total  2,324i  $3,014,389 i 
Source:  OIG analysis of Medicaid Management Information System claims  data, 2008. 
 
Some States Billing Practices Create Vulnerabilities 
The Minnesota, Texas, and Washington Medicaid programs allowed providers to bill for 
PCS in date ranges that included days on which no services were provided, a practice that 
makes it difficult to identify the number of PCS hours billed on any given day in a date 
range. This practice also makes it difficult to identify PCS claims that billed in excess of  
24 hours per day. For example, if the date range for a claim covers 4 days, up to 
384 15-minute units could be appropriate.  However, if the beneficiary received services 
on only 2 of those days, a maximum of only 192 units would be appropriate.  If the State 
OEI-07-06-00621        Medicaid-Funded Personal Care Services in Excess of 24 Hours per Day 
  Page 5  David Frank 
allowed the provider to submit a claim including 2 days on which no services were 
provided, any number of units up to 384 could appear appropriate, when in reality no 
more than 192 units could be appropriate. Our evaluation of Medicaid payments for PCS 
during periods of beneficiary institutionalization found that allowing providers to bill for 
PCS in date ranges that could include institutional stays may render State controls 
ineffective. One State was already in the process of implementing changes requiring 
providers to submit claims with exact dates of services to ensure that its payment edits 
would work in future institutional stays. Such a change could also help to prevent 
payments for PCS claims billed in excess of 24 hours per day and identify high hours 
claims that may need further evaluation.   
 
CONCLUSION 
 
The OIG report entitled Payments Made in Error for Personal Care Services During 
Institutional Stays (OEI-07-06-00620) focused on Medicaid payments for PCS provided 
during periods of institutionalization and noted the vulnerabilities associated with PCS 
billed in date ranges that include days on which no services were provided.  The report 
recommended that CMS (1) enforce existing Federal Medicaid policies that prohibit 
Medicaid reimbursement for PCS provided over a range of dates if the range includes 
days on which the beneficiary was institutionalized and (2) work with States to reduce the 
erroneous Medicaid payments for PCS during institutional stays.  In light of the 
additional analysis presented in this memorandum report, CMS may also want to 
consider providing States with information regarding the vulnerability associated with 
claims for PCS billed in excess of 24 hours per day and billing practices that permit 
providers to submit PCS claims in date ranges that include days on which no services 
were provided. 
 
This memorandum report is being issued directly in final form because it contains no 
recommendations.  We will forward the Medicaid PCS claims we identified that billed  
high hours per day under separate cover. If you have comments or questions about this 
report, please provide them within 60 days.  Please refer to report number 
OEI-07-06-00621 in all correspondence. 
 
 
cc:  	Jacquelyn White 
  Director, Office of Strategic Operations and Regulatory Affairs 
  Centers for Medicare & Medicaid Services 
 
 
OEI-07-06-00621        Medicaid-Funded Personal Care Services in Excess of 24 Hours per Day