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Department of Health and Human Services

Office of Inspector General -- AUDIT

"Seven Statesí Medicaid Claims for 21- to 64-Year-Old Residents of Institutions for Mental Diseases Who Were Temporarily Released to Acute Care Hospitals," (A-02-03-01002)

June 9, 2004

Complete Text of Report is available in PDF format (236 kb). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.


The common objective of the audits in seven States was to determine if controls were in place to preclude States, as required by Federal law and regulations, from claiming Federal Medicaid funds when 21- to 64-year-old residents of institutions for mental diseases (IMDs) were temporarily released to acute care hospitals for inpatient medical treatment.  In general we found the States had no controls or ineffective controls.  The seven States improperly claimed a total of $21.1 million in Federal Medicaid funds during various audit periods.  In individual reports to the States we recommended financial adjustments and procedural improvements.  In this rollup report to the Centers of Medicare and Medicaid Services (CMS) we recommended that CMS (1) reinforce to States that Federal Medicaid funds may not be claimed for 21- to 64-year-old IMD residents, including those temporarily released to acute care hospitals for inpatient medical treatment, (2) instruct States to develop and implement controls, where cost effective, to preclude claiming Federal funding in such instances, and (3) advise States not included in our review of the audit findings and encourage them to review their controls to prevent improper claims.  The CMS concurred with our recommendations.