- Associated Press - Monday, July 20, 2015

LOUISVILLE, Ky. (AP) - Advocates for companies that provide Medicaid-funded homes and services for Kentucky adults with disabilities are warning that state audits seeking repayments from the businesses could force some of them to cut back services or go out of business.

The businesses say the state is demanding repayment of millions of dollars for what amounts to minor paperwork errors, The Courier-Journal (https://cjky.it/1MCPKob) reported.

“This is ludicrous,” said Paul Schurman, a Louisville lawyer who represents one company affected by the audit and said he’s getting calls from others. “Not one is saying I provided bad care. It’s because I didn’t cross a T or dot an I.”

The advocates say the audits defeat the purpose of the program Kentucky started in 2007 to try to get adults out of institutions such as nursing homes or Oakwood, a state-run facility in Somerset.

Under that program, hundreds of adults moved from facilities into smaller, more homelike settings with expenses for daily living and care covered by Medicaid. If available homes and services decline, some people might wind up back in facilities they left, said Donovan Fornwalt, executive director of The Council on Developmental Disabilities in Louisville.

Officials with the state Cabinet for Health and Family Services said they are simply following the mandate of the federal Centers for Medicare and Medicaid Services to perform regular audits of billing for such programs.

Federal rules are exact about how individual companies must fill out paperwork and how to document services they provide, said Veronica Cecil, chief of staff for the cabinet’s Department of Medicaid Services. And once the state finds an error, it must seek repayment of any funds involved.

“We do not have discretion,” Cecil said. “Once it’s been identified, the federal government says we have to take it back.”

The state is seeking repayment of $2.7 million for 2011, 2012 and 2013, the three years it covered in last year’s audits of nearly 300 providers of care for adults with disabilities. Amounts range from a few hundred dollars up to $678,402 sought from Louisville-based ResCare, which bills itself on its website as “the nation’s largest private provider of services to people with disabilities.”

The state has collected about $600,000 so far through what it’s describing as “recoupment audits,” Cecil said. Of funds collected, 86 percent goes to the federal government and 14 percent to the state for the share it contributed to the program.

She noted that companies may appeal the repayment amount and the state is willing to work out plans for those unable to pay the full amount.

“We try to work very closely with providers,” she said.

Some companies, especially smaller or nonprofit ones, say they don’t have the money to repay the state - it’s already been spent on care of residents - and fear it could force them into bankruptcy or out of business. And some don’t have resources for lengthy administrative appeals.

“We respectfully request that recoupment for minor documentation errors be stopped immediately,” said the Kentucky Association of Private Providers in a statement released by Shannon McCracken, president of the association.

Providers don’t understand why they are being forced to repay money they spent housing, caring for people and providing therapy and activities, McCracken said.

“That money was not used in any way except to invest in that person’s success and make them successful in the community,” she said. “Just because Medicaid is now auditing and scrutinizing documents as they never have before, does not mean the services were not provided or not provided well.”


Information from: The Courier-Journal, https://www.courier-journal.com

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