S'ERV1CEs 

Office of Inspector General 

(" ~ DEPARTMENT OF HEALTH & HUMA SERVICES
 ~~~~::	 Washington, D.C. 20201 

OCT - 9 2008
 

TO:	 David Fran 

Director of Medicaid Integrity Group 

Centers for Medicare & Medicaid Services ~1lJ~ 

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 

This memorandum report provides the results of our analysis of 	 the total number of hours 

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 
 

 

 

 

 

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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 CBO’s 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 
 

 

 

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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 President’s 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 
 

State PCS Claims for Services From October 1 Through 

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 $3,014,389i

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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 

of Claims Amount Paid Total Paid Hours for These Claims 

Hours in Excess of 

Maximum Possible 

Percentage of Hours 

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 

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