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Department of Health and Human Services

Office of Inspector General -- AUDIT

"Review of Indiana’s Medicaid Upper Payment Limits for State Fiscal Years 2001 and 2002," (A-05-03-00068)

September 30, 2005

Complete Text of Report is available in PDF format (873 kb). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.


Our objectives were to determine whether Indiana calculated the upper payment limit (UPL) in accordance with Federal regulations and the approved State plan amendment for: non-State government hospitals (including UPL payments in the calculation of hospital-specific disproportionate share hospital limits) and non-State government nursing homes.  Indiana overstated the amounts available for UPL payments to non-State government hospitals by about $2.2 million for State fiscal year 2001 and by about $4.3 for 2002. The calculations were contrary to State plan provisions because they included unpaid claims rather than Medicaid payments. 

We recommended that Indiana refund $3,173,161 to the Federal Government and revise its UPL methodology to exclude unpaid Medicaid claims from the calculation.  In its reply, Indiana disagreed.