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Department of Health and Human Services

Office of Inspector General -- AUDIT

"Review of Medical and Ancillary Medicaid Claims for 21 to 62 Year Old Residents of State-Operated Psychiatric Hospitals That Are Institutions for Mental Diseases in California During the Period July 1, 1997 Through February 28. 2001," (A-09-01-00107)

December 5, 2002

Complete Text of Report is available in PDF format (2.85 MB). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.


This report provides the results of our review of medical and ancillary Medicaid claims for 21 to 64 year old residents of state-operated psychiatric hospitals that are institutions for mental diseases in California during the period of July 1, 1997 through February 28, 2001.  This audit is part of our ongoing review of Medicaid billings for patients in institutions for mental diseases (IMD).  The objective of this audit was to determine if the state of California had adequate controls to preclude claiming federal financial participation (FFP) under the Medicaid program when 21 to 64 year old residents of state-operated IMDs received physician services, laboratory and clinic services, and hospital outpatient treatment.  Federal Medicaid law and regulations prohibit FFP for this care.  Our review disclosed that although the state did not have specific edits to prevent it from claiming FFP, only a minor amount of unallowable FFP was claimed for medical and ancillary services.  We concluded that the state was in substantial compliance with federal rules prohibiting claims for FFP under the Medicaid program for medical and ancillary services provided to residents 21 to 64 years old in its two state-operated psychiatric hospitals.