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Audit (A-07-09-02767)

Review of Colorado’s Claims Associated With the Increased Federal Medical Assistance Percentage Under the American Recovery and Reinvestment Act of 2009

Executive Summary

Colorado’s $142 million in claims associated with the temporarily increased Federal medical assistance percentage (FMAP) was computed using the Medicaid expenditure base specified in the American Recovery and Reinvestment Act of 2009, P.L. No. 111-5 (Recovery Act), and the expenditures were supported by the State’s accounting records. The Recovery Act provides, among other initiatives, fiscal relief to States to protect and maintain State Medicaid programs in a period of economic downturn. For the recession adjustment period (October 1, 2008, through December 31, 2010), the Recovery Act provides an estimated $87 billion in additional Medicaid funding based on temporary increases in States’ FMAPs. The Federal Government pays its share of a State’s medical assistance expenditures under Medicaid based on the FMAP, which varies depending on the State’s relative per capita income. Colorado had policies and procedures in place to segregate Medicaid expenditures that qualified for the temporarily increased FMAP and to ensure that those Medicaid expenditures that did not qualify were not claimed for reimbursement at the temporarily increased FMAP. However, the State had not documented all of its policies and procedures.

We recommended that Colorado document all of its policies and procedures for claiming the temporary increase in FMAP. The State partially concurred with our recommendation.

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