Ala. organization overdrew $15M in federal Medicaid funds
By - From 2010 to 2012, the Alabama Medicaid Agency withdrew $14.8 million that exceeded net Medicaid expenditures, according to a recent Office of Inspector General (OIG) report. Specifically, the state agency obtained $18.9 million more in federal funds than it expended. From those funds, the organization withdrew the $14.8 million.
“These inappropriate Medicaid withdrawals occurred because the State agency miscalculated and overstated the Federal share of expenditures in its cashbook, paid for overdrawn balances in previous years’ PMS accounts, and withdrew funds for expenditures of another federally funded program,” OIG explained in its report.
States estimate their Medicaid expenses before each quarter and the Center for Medicare & Medicaid Services (CMS) takes those estimates to determine the initial grant awards, which are the Federal fund amounts that will be available to States during the quarter. According to the OIG, if a State underestimates the amount of funds it will need during a quarter, it might request more funds through an additional grant award.
The Alabama agency used its own workbook to record expenditures and the manually calculated Federal shares, the OIG stated. Payment Management System (PMS) withdrawals were also included in the Alabama workbook. The agency then used its workbook’s ending balance to increase or decrease its funds obtained from the government.
The OIG recommended in its report that the state entity refund the $14.8 million to the federal government. However, the Alabama agency did not agree with OIG and instead explained that it had worked to address the OIG’s other five recommendations.
“Alabama Medicaid respectfully does not concur with OIG’s recommendation at this time,” the agency said in its response to OIG. “The amount at issue is the subject of ongoing discussions with CMS. As noted in the Draft Report, CMS duplicated certain expenditures when it calculated the final Medicaid grant awards for the State. CMS reversed these duplicated expenditures in mid-2013 and requested that Alabama Medicaid return $15,483,957. Alabama Medicaid will consider OIG’s findings as it continues to work toward a resolution with CMS on this issue.”
The other recommendations from OIG included that the state entity work with CMS to determine whether the $4,092,025 withdrawn for FY 2013 Medicaid expenditures should be refunded to the Federal Government and ensure that funds are withdrawn from the appropriate PMS account. Additionally, the organization needs to create procedures that compare withdrawn Federal funds with actual net Medicaid expenditures and ensure that CMS calculations of final grant awards are accurate.
It was also recommended that the Alabama agency investigate reasons for account balances. This is especially critical if CMS has not finalized the funds and they are meant to pay for overdrawn balances in other PMS accounts. Finally, the state entity was asked to separate Medicaid expenditures from other federally funded program expenditures when it is calculating Medicaid withdrawals.
