Kaleida Health has agreed to pay back $1.6 million in Medicaid claims made on dental services at a clinic in Women's & Children Hospital.
State Attorney General Eric T. Schneiderman announced the settlement on Friday, and commended Kaleida for self-disclosing the Medicaid overpayment, which was caught as a result of the health system's own internal audit.
The State Attorney General's Medicaid Fraud Control Unit followed up with an investigation that showed between Jan. 1, 2005 and June 29, 2012 the clinic submitted and received Medicaid payments for dental services that did not qualify for reimbursement.
The pediatric clinic operated out of the hospital, but was run by dentists from the University at Buffalo School of Dental Medicine, Kaleida officials said Friday.
Those dentists have since moved out of the hospital, and Kaleida now runs a smaller, specialized clinic for more severe dental cases.
"Kaleida Health's internal audit uncovered the billing error and we immediately notified New York State," said Michael Hughes, a Kaleida spokesman. "Since this initial discovery, we have worked closely with state officials regarding overpayment."
In addition, Hughes said, Kaleida plans to seek restitution from UB for these dental overpayments.
Medicaid regulations authorize reimbursements only for teeth cleanings performed every six months, except in instances of medical necessity.
In this case, the dental clinic billed Medicaid for patients who received cleanings more often than once in six months.
In some instances, the dental clinic billed for exams, x-rays and cleanings separately over multiple visits, which increases the cost to the program. Medicaid requires dental clinics to perform the service and bill during one office visit, the state said.
"The regulations for dental clinics are clear and so are the obligations on health care providers - if services are billed in violation of the rules for Medicaid reimbursements, the state is owed money," Schneiderman said in a prepared statement.