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Audit (A-06-09-00097)

07-06-2011
Review of the Quarterly Medicaid Statement of Expenditures for the Medical Assistance Program in Oklahoma

Executive Summary

For the quarter ended December 31, 2008, the Oklahoma Health Care Authority (State agency) generally claimed Federal reimbursement of approximately $1 billion in Medicaid expenditures in accordance with Federal requirements. However, the State agency applied incorrect Federal Medical assistance percentages (FMAP), resulting in an overstatement of the Federal share totaling $12,000; overlooked $6,000 in expenditures, resulting in an understatement of the Federal share of approximately $5,000; and received an enhanced family planning Federal share totaling $127,000 for inpatient hospital expenditures, the appropriate amount of which we could not determine.

In addition, the State agency made $2.8 million ($2.1 million Federal share) in additional Program of Assertive Community Treatment payments that were unallowable.

The American Recovery and Reinvestment Act of 2009 (Recovery Act), enacted February 17, 2009, provided an estimated $87 billion in additional Medicaid funding based on temporary increases in States' FMAPs. With the Recovery Act funding, Oklahoma's FMAP for Medicaid expenditures increased from 65.90 percent to 74.94 percent for the quarter ended December 31, 2008.

We recommended that the State agency (1) refund to the Federal Government $2.1 million, consisting of enhanced Federal share that it improperly received and additional PACT payments; (2) claim a Federal credit of $5,000 for overlooked expenditures; (3) work with the Centers for Medicare & Medicaid Services (CMS) to determine what portion of the $127,000 in enhanced family planning Federal share that it received was allowable; (4) ensure that the full range of diagnosis codes allowable at the enhanced family planning FMAP are entered into its computer system for family planning waiver services; (5) establish review procedures to ensure that Medicaid expenditures are correctly compiled, assigned, and claimed in accordance with the approved State plan; and (6) submit documentation to CMS supporting the reasonableness of the 35-percent rate for allocating inpatient hospital expenditures to the enhanced family planning FMAP. The State agency agreed with our finding related to incorrect FMAPs but disagreed with or did not address our other findings.

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