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Audit (A-03-09-00204)

Review of Pennsylvania's Compliance With the Prompt Payment Requirements of the American Recovery and Reinvestment Act of 2009

Executive Summary

Our review found that Pennsylvania complied with the prompt pay requirement for receiving an increased Federal medical assistance percentage (FMAP) under the American Recovery and Reinvestment Act of 2009 (Recovery Act) for claims received on all days from February 16, 2009, through September 30, 2009. In addition, all practitioner, nursing facility, and hospital claims received after May 31, 2009, met the requirements for an increased Federal share.

Pursuant to the Social Security Act, the Federal Government pays its share of a State's medical assistance expenditures under Medicaid based on the FMAP, which varies depending on the State's relative per capita income. For the recession adjustment period (October 1, 2008, through December 31, 2010), the Recovery Act provides an estimated $87 billion in additional Medicaid funding based on temporary increases in States' FMAPs. Federal regulations require State Medicaid agencies to pay 90 percent of all clean claims from practitioners within 30 days of the date of receipt (the prompt pay requirement). A clean claim is a claim that can be processed without obtaining additional information from the provider or a third party.

The State did not meet the 30-day prompt pay requirement for claims received on any day from January 20, 2009, through February 15, 2009, and for claims received on November 29, 2008, and December 13, 2008. However, during our review, the State agency requested a waiver of the prompt pay requirement for claims submitted by practitioners that were received by the State agency before February 18, 2009. The Centers for Medicare & Medicaid Services granted the waiver; therefore, we have no recommendations.

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