Department of Health and Human Services

Office of Inspector General -- AUDIT

"Review of Medicaid Payments For Outpatient Services and Prescription Drugs Provided to Incarcerated Recipients in the State of Missouri," (A-07-02-03020)

October 4, 2002

Complete Text of Report is available in PDF format (406 KB). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.


During a prior audit we determined that the Centers for Medicare & Medicaid Services (CMS) had not obtained recipient data from the Social Security Administration (SSA) that identifies incarcerated recipients.  As a result, potentially improper Medicare payments were made by CMS. Based on this work, we undertook a review of Medicaid fee-for-service payments for services provided to incarcerated recipients in four states to determine if the Medicaid program had similar vulnerabilities.  The state of Missouri was one of the four states selected for review.  The CMS guidelines and state Medicaid regulations generally provide that Medicaid will not cover outpatient services or the cost of prescription drugs for inmates.  We found that improper Medicaid fee-for-service payments for outpatient services and prescription drugs have been made for incarcerated recipients. However, we did not find enough errors in our sample to make a statistically valid projection of the overpayments to the universe.  In our opinion, the claims were paid because the state did not fully utilize the available data from SSA to identify incarcerated recipients.  We recommended that the state utilize the data available from the SSA to identify incarcerated recipients to ensure that unallowable payments for services provided to inmates are not made in the future.