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Department of Health and Human Services

Office of Inspector General -- AUDIT

"Review of Medicaid Community Mental Health Center Provider Services in Indiana," (A-05-05-00057)

April 9, 2007

PDF File Complete Text of Report is available in PDF format (783 kb). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.


For fiscal year (FY) 2003, Indiana paid community mental health center (CMHC) providers about $226.5 million ($144 million Federal share) in total Medicaid reimbursement for Medicaid Rehabilitation Option (MRO) services. Our objective was to determine whether the MRO services were provided by qualified staff, were adequately documented, and were accurately paid on behalf of eligible beneficiaries.

Based on a statistical projection of the sample results, we estimate that Indiana overpaid CMHC providers at least $33,407,323 ($21,298,841 Federal share) in reimbursement for services provided during FY 2003. The overpayment occurred because the services did not meet Federal and State reimbursement requirements. Indiana did not have adequate internal controls to monitor the providers to ensure that rehabilitation services were in compliance with the “State Medicaid Manual” and Federal regulations.

We recommended that Indiana refund $21,298,841 to the Federal Government and strengthen internal controls over the monitoring of MRO services by furnishing written notification to CMHC providers reminding them to prepare and retain complete documentation to fully support Federal and State claiming provisions. Indiana agreed with our second recommendation and partly agreed with our first recommendation.