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Audit (A-04-11-04016)

11-08-2012
Noninstitutional Providers in North Carolina Did Not Reconcile Invoice Records With Credit Balances and Report the Associated Medicaid Overpayments to the State Agency

Executive Summary

North Carolina's Medicaid program defines a credit balance as an improper or excess payment made to a provider as the result of recipient billing or claims processing errors. Generally, the eight noninstitutional providers that we sampled did not reconcile invoice records with credit balances and report the associated Medicaid overpayments to the Department of Health and Human Services (State agency). Of the 185 invoice records with both Medicaid payments and credit balances in our sample, 112 contained Medicaid overpayments, but 73 did not.

The providers did not identify and report Medicaid overpayments because the State agency did not require providers to exercise reasonable diligence in reconciling invoice records with credit balances to determine whether overpayments existed.

We recommended that the State agency refund $10,000 ($7,000 Federal share) to the Federal Government for overpayments paid to the selected noninstitutional providers and enhance its efforts to recover additional overpayments estimated at $1.26 million ($902,000 Federal share) from our audit period and realize future savings by requiring providers to exercise reasonable diligence in reconciling invoice records with credit balances and reporting the associated Medicaid overpayments. The State agency concurred with our findings and recommendations.

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