Department of Health and Human Services

Office of Inspector General -- AUDIT

"Review of University of Massachusetts Administrative Cost Claims Under the Medicaid Program For the Period From July 1, 2002 Through June 30, 2004," (A-01-04-00012)

March 23, 2006

Complete Text of Report is available in PDF format (400 kb). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.


Our objective was to determine whether the Office of Medicaid's (State agency) claim for selected administrative costs incurred by the University of Massachusetts met applicable Medicaid program requirements.  Our review of administrative claims data for State fiscal years 2003 and 2004 disclosed that $614,022 Federal share was ineligible for reimbursement.  These unallowable claims were related to contingency fee payments, excessive payments to a subcontractor, and salaries.

We recommended that the State agency refund $614,022 to the Federal government; establish procedures to ensure compliance with Federal regulations regarding contingency fee payments, subcontractor costs, and salaries claimed for Medicaid reimbursement; and establish and enforce proper internal controls over timekeeping procedures for salaries claimed for Medicaid reimbursement.  The State agency agreed with our procedural recommendations and agreed to refund unallowable costs of $480,853 (Federal share) related to contingency fee payments and subcontractor costs.  The State agency disagreed with our recommendation to refund $133,169 (Federal share) related to salaries.