Our objective was to determine if the Vermont Medicaid State agency reported overpayments to Medicaid providers as credits to the Medicaid program in accordance with Federal requirements during the period January 1, 2004, through June 30, 2005. The State agency did not report overpayments totaling $343,925 ($201,383 Federal share) in accordance with Federal requirements. Specifically, the State agency’s recovery units had identified overpayments to providers totaling $172,441 ($100,861 Federal share) that the State agency had not credited to the Medicaid program. In addition, the State agency did not credit the Medicaid program for overpayments totaling $171,484 ($100,522 Federal share) that were discovered through the cost report settlement process.
We recommended that the State agency (1) report a credit of $201,383, the Federal share of provider overpayments that it owes the Medicaid program; (2) establish formal policies and procedures for processing all provider overpayments that the State agency recovery units and the intermediary identify; and (3) ensure that all overpayments to providers are reported as credits to the Medicaid program within 60 days of discovery, as Federal regulations require. In its response to our draft report, the State agency indicated that it has made or will make the recommended adjustments. The State agency also agreed with our procedural recommendations.