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Review of Medicaid Supplemental Rate Payments to UMass Memorial Health Care, Inc., for Fiscal Years 2004 and 2005

Of the $337 million that the Massachusetts Executive Office of Health and Human Services (the State agency) claimed in Medicaid supplemental rate payments to UMass Memorial Health Care, Inc. (UMMHC), during fiscal years 2004 and 2005, we found that $11.5 million ($5.75 million Federal share) was not claimed in accordance with Federal and State plan requirements. We also identified an additional $5.6 million ($2.8 million Federal share) in supplemental payments that represented payments to the University of Massachusetts Medical School on which we were unable to express an opinion.

We recommended that the State agency (1) make a financial adjustment of $11.5 million ($5.75 million Federal share), (2) work with the Centers for Medicare & Medicaid Services (CMS) to determine the appropriateness of $5.6 million ($2.8 million Federal share) in supplemental payments representing UMMHC payments to the Medical School, and (3) follow State plan requirements when submitting claims for supplemental payments. The State agency disagreed with $8.5 million of our $11.5 million finding but agreed to work with CMS in resolving our finding related to payments to the Medical School.