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Audit (A-04-08-03040)

Allowability of Alabama's Hurricane Katrina-Related Uncompensated Care Claims

Executive Summary

For services supplied through January 31, 2006, by five providers that received high uncompensated care pool (UCCP) reimbursement, the State generally claimed reimbursement in accordance with the approved section 1115 demonstration and UCCP plan. Under section 1115 of the Social Security Act, CMS authorized certain States to operate a UCCP to reimburse providers for medically necessary services provided to Hurricane Katrina evacuees and affected individuals and to Hurricane Rita evacuees without other coverage. However, we found that nine claims totaling $27,000 were unallowable because the individuals who received the services were not from an area affected by Hurricane Katrina or Rita, had health care coverage under other programs, or did not provide an address that could be used to establish eligibility. One other claim totaling $16,000 was allowable as a UCCP claim, but the State inappropriately used this claim in its Medicaid disproportionate share hospital (DSH) calculation. We recommended that the State refund $27,000; consider reviewing the claims that were not included in our sample and, if appropriate, make a refund to CMS; and determine the effect of incorrectly including a claim reimbursed under the UCCP in the hospital-specific DSH calculation and make an appropriate adjustment on its quarterly claim. The State concurred with our first recommendation and did not address our second recommendation. With respect to our third recommendation, the State said that the hospital would have received only a small payment from the inclusion of the UCCP claim in the DSH calculation. We revised our third recommendation in response to the State's comments.

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