Texas Did Not Always Calculate Physician Supplemental Payments Made to the University of Texas Health Institutions in Accordance With Federal and State Requirements

The Texas Health and Human Services Commission (State agency) did not always calculate supplemental payments made to the University of Texas (UT) health institutions in accordance with Federal and State requirements. Specifically, the supplemental payment calculations included overstated Medicare equivalent fees for claims that included payment modifiers and diagnostic test modifiers, Medicaid services that were performed by ineligible providers, and Medicaid services that did not have Medicare equivalent fees. As a result, the State agency claimed $57.9 million (Federal share) in unallowable supplemental payments made to the UT health institutions for the period May 1, 2004, through September 30, 2007.

The overpayments occurred because the State agency did not have any formal written policies and procedures to ensure that the methodology used to calculate supplemental payments was consistent with the terms of the Texas State plan amendment 04-010 and complied with Federal and State requirements. We recommended that the State agency refund to the Federal Government the $57.9 million Federal share of improper supplemental payments made to the UT health institutions.