The Maine Department of Health and Human Services continues to fall short of federal standards for collecting Medicaid overpayments to nursing homes, according to an audit released Tuesday.

The DHHS had yet to collect nearly $4.4 million in Medicaid overpayments to 92 nursing homes that exceeded the one-year policy for repayment under federal guidelines, the Office of the Inspector General of the U.S. Department of Health and Human Services wrote in an August report. The inspector general said the DHHS failed to implement both recommendations of an earlier review on Medicaid overpayments and recommended the two agencies work together to refund the federal portion of the $4.4 million.

Medicaid overpayments are relatively common, but the Maine DHHS has been under pressure for several years to do a better job of recouping the overpaid funds. The Office of Inspector General conducted audits in 2008, 2009 and 2011 in an effort to help the state address the issue, which in the past has been blamed on computing and accounting problems.

FIXES PROPOSED IN 2011

After the 2011 report, the DHHS refunded $1.9 million to the federal government out of $3 million in Medicaid overpayments to seven nursing homes. However, the 2011 audit identified another $1 million owed to the federal Centers for Medicare and Medicaid Services because of overpayments that had not yet been collected from 45 facilities.

“The state agency refunded $1.09 million in uncollected overpayments from 45 nursing facilities, but it did not implement policies and procedures that ensure the return of identified overpayments in the required amount of time,” reads the August report from the Office of the Inspector General. “As a result, the state agency had $4,368,348 in uncollected Medicaid overpayments from 92 nursing facilities that exceeded the 1-year refund period.”

In a July 27 letter to the regional inspector general’s office in Boston, Maine DHHS Commissioner Mary Mayhew offered a series of proposed corrections that she predicted would bring Maine into compliance with the federal requirements.

Mayhew agreed to work with the Centers for Medicare and Medicaid Services to identify and refund the federal share of the nearly $4.4 million in overpayments. She also wrote that a new computer system is helping to streamline the process of identifying overpayments and returning that money to the federal government, adding that DHHS had shown “significant improvement” in later periods.

“Further enhancements to database solutions, as well as improved data transitions between state agencies as governed by Memorandum of Understanding, will continue to foster improvement in regard to the return of Medicaid overpayments,” Mayhew wrote.

Maine DHHS spokesman David Sorensen took issue on Wednesday with the audit’s conclusion that the department failed to implement both recommendations from the prior review. Sorensen said Maine DHHS repaid the $1.09 million and implemented policies and procedures to ensure overpayments are repaid in a timely manner.

“However, results did not accrue at the pace OIG would have preferred. Nonetheless, we are seeing continually improving results, as the Commissioner noted in her letter,” Sorensen said.

Sorensen added that the overpayments “pale in comparison to the size and scope of the historic underpayments to Maine nursing homes” through MaineCare, the state’s Medicaid program. Addressing those underpayments has been a priority for Gov. Paul LePage.