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Audit (A-04-09-04041)

Review of Federal Reimbursement Claimed by North Carolina for Medicaid Personal Care Services Claims Submitted by Shipman Family Home Care, Inc.

Executive Summary

Based on our sample results, we estimated that North Carolina improperly claimed $1.3 million (Federal share) for unallowable personal care services during the period July 1, 2005, through June 30, 2007. Of the 100 sampled claim line items in our random sample, 44 complied with Federal and State requirements, but 56 did not. Of the 56 items that were not compliant, 24 contained more than 1 deficiency. These deficiencies occurred because the State's Division of Medical Assistance did not have sufficient resources to adequately monitor Shipman Family Home Care, Inc.'s (Shipman) personal care services program for compliance with certain Federal and State requirements. Personal care services are generally furnished to individuals in their homes and not residing in hospitals, nursing facilities, intermediate care facilities for the mentally retarded, or institutions for mental diseases.

We recommended that the State (1) refund $1.3 million to the Federal Government and (2) continue its efforts to implement additional procedures and controls for monitoring the providers of personal care services for compliance with Federal and State requirements. Shipman acknowledged that some of its claims were noncompliant but believed that these claims were anomalous and not representative of its general compliance efforts. After reviewing Shipman's comments, we did not make any revisions to our findings. The State concurred with all of our findings and found the recommendations to be both reasonable and appropriate.

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