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Providers Did Not Always Reconcile Patient Records With Credit Balances and Report and Return the Associated Medicaid Overpayments to State Agencies

This review of Medicaid credit balances included reviews in eight States and eight providers in each State. In each State, we reviewed acute care hospitals, nursing facilities, or certain noninstitutional providers.

Providers did not always reconcile patient records with credit balances and report and return the associated Medicaid overpayments to the State agencies. Of the 1,102 patient records with credit balances that we reviewed in 8 States, 538 did not contain Medicaid overpayments; however, 564 patient records contained Medicaid overpayments totaling $264,000 ($170,000 Federal share). On the basis of these results, we estimated that the eight States in our review could realize an additional recovery of $25 million ($16.8 million Federal share) from our audit period and could obtain future savings if they enhanced their efforts to recover overpayments in provider accounts.

Generally, providers did not identify, report, and return Medicaid overpayments because the States did not require that providers exercise reasonable diligence in reconciling patient records that had credit balances with charges and payment records to determine whether overpayments existed. There was no requirement that States ensure providers perform reconciliations, and some providers did not reconcile some patient records for more than 6 years.

We recommended that CMS issue Medicaid regulations to clarify the requirements of the Affordable Care Act that parallel its proposed Medicare rules and require that States ensure that providers exercise reasonable diligence to identify, report, and return overpayments. CMS concurred with our recommendation.

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Office of Inspector General, U.S. Department of Health and Human Services | 330 Independence Avenue, SW, Washington, DC 20201