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Florida Claimed Some Medicaid Administrative Costs That Did Not Comply With Program Requirements

Of the $44.4 million ($22.2 million Federal share) in Agency for Persons With Disabilities (APD) administrative costs that APD allocated to Medicaid and that the Medicaid agency claimed during fiscal years 2007 through 2009, we estimated that $4.4 million ($2.2 million Federal share) did not comply with Federal requirements and therefore was unallowable for Federal financial participation. Furthermore, we could not determine whether the remaining $40 million ($20 million Federal share) was allowable because we could not quantify the effect of vulnerabilities identified in the statistical sampling methods used.

We recommended that the Medicaid agency (1) refund $2.2 million to the Federal Government; (2) ensure that APD follows procedures defined in its Cost Allocation Plan to ensure accurate completion and sufficient review of all observation forms; (3) work with CMS to determine what portion of the remaining $40 million ($20 million Federal share) in costs allocated to Medicaid based on random moment sampling (RMS) was allowable under Federal requirements; and (4) require APD to amend its Cost Allocation Plan to help ensure that APD's RMS gives appropriate consideration to all hours worked by employees, properly accounts for invalid responses and nonresponses, and requires observation forms to include the sampled position number. The Medicaid agency described actions that it was taking, or that it planned to take, to address the three recommendations with which it concurred; however, it disagreed with our first recommendation.

Filed under: Center for Medicare and Medicaid Services