The D.C. Department of Human Resources paid nearly half of the dollars in one portion of its Medicaid program for persons who were ineligible for the program or whose eligibility was improperly documented, acting DHR director Albert P. Russo said yesterday.

As a result, the city has a payment error rate higher than that of any state in the nation, according to a nationwide survey compiled for release later this week by the Department of Health, Education and Welfare.

There were $1.8 million in erroneous payments out or $4 million in claims in a random sample survey of one six-month period, Russo said, and about $3.6 million in erroneous payments out of about $10 million in claims surveyed in another six-month period.

The mispayments were documented in federally required reviews of the agency's administration of the $30 million-a-year medically needy program, which provides Medicaid insurance for an estimated 30,000 people.

Russo said he has not seen the HEW report and is unaware of the city's rank. He said it was unfair to campare DHR's error rate with that of the states because state error rates generally include statistics from less problem prone rural and semiurbans as well as major metropolitan areas.

Russo did not downplay the gravity of the city's rate. "It's a serious problem, a serious problem," he said. Russo blamed the high error rate on lack of adequate staff in the 10,000-employee agency. "You've got to have the horses to pull the load. We don't have all the horses we need," he said.

The first six month survey was taken between October, 1975, through March, 1976, and reviewed an undisclosed number of claims on 135 cases, Russo said. Of the $4 million in claims paid by DHR, 46.7 per cent were erroneous.

A later review of about $10 million in claims from 450 cases paid from April, 1976, through September, 1976, showed that 42 per cent of the payments were made in error, according to Russo.

The figures released yesterday represented the "first valid statistics" that have come out of HEW in the past year on Medicaid payment errors, Russo said. But they were not the first record of ineligible payments in city welfare programs.

In 1975, th city paid out $1.3 million in food stamp money and $2.2 million in Medicaid assistance for persons who had falsified their welfare application, the General Accounting Office reported late last year. GAO also found in a separate study that during one six-month period last year, DHR paid a quarter of its welfare dollars in erroneous or overpayments.

THe medically needy program accounts for about one-third of the city's annual Medicaid budget and serves about one-fourth of all the persons on Medicaid."

The program gets half of its funds from the city government and half from HEW. It is designed for people considered too poor to bear the full cost of health care but whose incomes make them ineligible for welfare.

The maximum income for medically needy Medicard eligibility in the District is about $3,800 for a family of four and about $3,000 for a family of two. However, persons whose incomes exceed those amounts and can prove that they have "excessive" medical bills may also receive assistance through the program.

Russo was unable to say specifically yesterday what the causes of ineligibility were and whether the greater portion of the errors could be attributed to DHR administrative shortcomings or misrepresentation and lax reporting by recipients.

In general, he said, the errors were likely to involve unreported income and unreported changes in family composition by recipients, and failure by the agency to promptly act on eligibility information available and incorrect interpretation of Medicaid eligibility policies.

In nine of the instances involved in the first review, payments were considered made in error because DHR had failed to properly file records on medically needy recipients, according to Ronald Carter, chief of the DHR office which reviewed the files.

Ulysses Banks, deputy director of DHR's payments assistance administration, said the agency is now monitoring its elegibility files more closely. But unless additional persons are released from other duties, he said, no more personnel can be added from Medicaid eligibility processing.

DHR had announced earlier that beginning next week, all 160,000 persons in the Medicaid program will have to have additional verification of eligibility to receive Medicaid services. New eligibility cards good for only one month at a time will be issued beginning May 2. In the past, Medicaid cards alone were good for six months to one year.

Russo said the high payment error rate would not jeopardize the city's funding from HEW. "We're not going to lose a dime as far as federal reimbursement is concerned," he said. "But the problem is there are too many clients within the medically needy program who are receiving services and are ineligible."

Russo also announced yesterday that DHR soon will use more than $1 million in federal and local funds by opening three narcotics treatment centers.