Alabama Balks at Returning $88.2M in Medicaid Overpayments to Feds

September 6, 2013 - 2:18 PM

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(Alabama Medicaid Agency)

( – The State of Alabama is balking at refunding the federal government $88.2 million in “unallowable” Medicaid bonus payments it received during fiscal years 2009 and 2010, according to an audit by the Office of the Inspector General (OIG) in the Department of Health and Human Services (HHS).

The OIG initiated the review because “the amounts of the payments [to Alabama] were relatively high compared with those of other States receiving bonus payments.”

“Alabama received $95 million (34 percent) of the $281 million in bonus payments made to all States for these [years, 2009 and 2010],” the report states, but 92 percent of the bonus payments Alabama received were later deemed “unallowable.”

Under the Children’s Health Insurance Program Reauthorization Act (CHIPRA), qualifying states have received bonus payments since 2009 “to offset the costs of increased enrollment of children in Medicaid,” which “provides medical assistance to low-income individuals and individuals with disabilities.” The program is funded by both the federal and state governments.

The Centers for Medicare and Medicaid Services (CMS) consider states eligible for “performance bonus” payments if they increase their “current enrollment of qualifying children (current enrollment) above the baseline enrollment of qualifying children (baseline enrollment) for a given year.”

However, Alabama Medicaid “overstated its current enrollments because, rather than reporting a monthly average enrollment of qualifying children, it reported to CMS the total number of all qualifying children that had been enrolled in its program for each year reviewed.”

Alabama reported that 474,473 children were enrolled in Medicaid in 2009 and 516,469 children were enrolled in 2010. However, OIG calculated that the number reported should have been 382,103 children in 2009 and 423,238 in 2010. As a result, the state should have only received $1.5 million in 2009 and $5.7 million in 2010.

Over-reporting enrollment by over 92,000 children in 2009 and over 93,000 the following year resulted in a total overpayment of $88.2 million for both years, the audit found.

The OIG recommended that Alabama refund that amount to the federal government and ensure that it submits correct calculations in the future. Although the Alabama agency agreed to change the way it reports future Medicaid enrollment figures, it refused to return the money.

“Alabama Medicaid believes that it qualified for the bonuses at issue,” the agency said in response to the OIG report.

“While the State remains dedicated to capturing each and every qualified child in the bonus calculations, the reconstruction and validation of historical enrollment data from disparate information systems has proven a costly and time-intensive endeavor.

“Public resources would best be expended in further discussions with CMS and through the continuing use of innovative efforts to enroll and retain all eligible Alabama children in Medicaid,” the state agency argued.