Auditors Find State Overpaid Medicaid Home Health Vendors $39.4 Million

A recent audit found that the state of Michigan has delivered millions of dollars in overpayments to vendors under a Medicaid program meant to help needy people with daily activities such as bathing, cooking and shopping.

The Michigan Department of Health and Human Services pays individuals and agencies to provide such in-home care for indigent and low-income individuals under its Home Help Program.

But service providers received $39.4 million in overpayments, according to a performance audit released by the Office of the Auditor General, covering October 2017 through September 2019.

Auditors found numerous errors in processing payments, including paying providers for services that were never delivered. Program managers also could not always document which services were provided to beneficiaries, and they sometimes made payments that had not been previously approved.

Department officials agreed stating, “MDHHS agrees that Home Help invoices were not always properly monitored to ensure that payments were adequately supported and properly approved.”

This is not the first time the Office of the Auditor General found issues with the Medicaid Home Help Program. In an audit covering October 2010 through August 2013, auditors discovered $160 million in improper payments.

The more recent audit determined the bureau that manages the home help program did not properly monitor whether its homebound beneficiaries received the services the program was billed for. Nor did the managers adequately document what services were supposed to be provided. Auditors concluded from this there was an increased risk of fraud, perpetrated by clients or providers or both.

Department officials agreed that there were oversight problems with the Home Help program, dealing with things such as signature requirements and activity logs. But they disputed the auditors’ projections of the number of missing service logs and logs without appropriate signatures, saying the numbers are lower than what auditors maintain.

A different state office that pays benefits to individuals also has had problems producing correct records: the Michigan Unemployment Insurance Agency. In 2020 it was unable to process the huge number of claims for unemployment benefits that resulted from the COVID epidemic. In some cases, the failures included benefit overpayments, for which the agency is now seeking refunds

The Michigan Department of Health and Human Services did not respond to requests for comment when ask if it will require service providers in the Home Help Program to pay back overpayments.