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Department of Health and Human Services

Office of Inspector General -- AUDIT

"Review of Managed Care Payments Made Under the State of Texas Access Reform Plus Managed Care Program," (A-06-01-00039)

January 25, 2002

Complete Text of Report is available in PDF format (833 kb). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.


This report provides the results of our audit of Medicaid payments made by the Texas Department of Human Services (TDHS) under the State of Texas Access Reform Plus (STAR+PLUS) managed care program. The objectives of our review were to determine whether STAR+PLUS members were eligible for managed care and assigned to the appropriate risk group for payment purposes, and whether any unallowable Medicaid payments were made in the fee-for-service sector for services provided under the managed care program. Our review disclosed that TDHS made risk group assignment errors for eligible STAR+PLUS members during fiscal year 2000. As a result, an overpayment of $40,070 was made to HMOs participating in the STAR+PLUS program. We did not identify the impact these payment errors had on the total population of Medicare members totaling about 49,500 for FY 2000. However, for FYs 1998 and 1999, TDHS' internal audit identified an overpayment totaling $387,214 and an underpayment totaling $1,102,399. We are recommending that the Commission ensure that TDHS: (1) makes the appropriate adjustments for the $387,214 overpayment and $1,102,399 underpayment; (2) recoups the $40,070 related to the payment errors; (3) makes the necessary adjustments to the related Federal Financial Participation (FFP) amount; (4) corrects the payment system problems; and (5) reports to us the impact of these problems on the 49,500 members enrolled during FY 2000. The Commission agreed with our recommendations and has taken action to recover overpayments and correct payment system problems.