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Audit (A-07-08-03107)

Review of Missouri Medicaid Payments for the School District Administrative Claiming Program for Federal Fiscal Years 2004 Through 2006

Executive Summary

Of the $15.3 million (Federal share) that Missouri claimed in Medicaid administrative costs for the St. Louis Public and Springfield school districts for FYs 2004 through 2006, $4.2 million was unallowable for Federal reimbursement because the State did not correctly calculate and claim administrative costs for the School District Administrative Claiming (SDAC) program. In addition, because of errors identified during our review of the St. Louis and Springfield school districts, the other Missouri school districts received $16.3 million in unallowable Medicaid payments for FYs 2004 through 2006. We set aside for CMS adjudication $1.5 million for administrative costs claimed for the St. Louis Public and Springfield school districts and $3.9 million for administrative costs claimed for all other Missouri school districts. The SDAC program permits children to receive health-related services, generally without having to leave school. States may be reimbursed for the administrative activities that directly support identifying and enrolling potentially eligible children in Medicaid.

We recommended that Missouri (1) refund $20.5 million to the Federal Government for unallowable SDAC expenditures; (2) work with CMS to determine what portion of the school district administrative costs claimed for the quarter ending December 2004 was allowable; (3) review all school district Medicaid administrative claims that the State paid after March 2006 to determine whether it included nonresponses in the sample and, if so, recalculate the administrative claims and refund to the Federal Government the amount overpaid; and (4) strengthen policies and procedures to ensure that SDAC expenditures submitted for Federal reimbursement are accurate and reasonable. Missouri partly agreed and partly disagreed with our recommendations. Nothing in the State’s comments caused us to change our findings or recommendations.

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