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Audit (A-09-10-02013)

03-26-2012
Review of the Quarterly Medicaid Statement of Expenditures for the Medical Assistance Program in Washington State

Executive Summary

For the quarter ended September 30, 2009, Washington State generally claimed Federal reimbursement for its Medicaid expenditures in accordance with certain Federal requirements. However, the State improperly claimed Federal reimbursement of $5.2 million, including $10 million in expenditures that were not actual expenditures (Federal share overstated by $5.2 million), $32,000 in expenditures for duplicate payments (Federal share overstated by $20,000), and $73.6 million in expenditures that were incorrectly reported on the Form CMS-64 (Federal share understated by $11,000). Most of the claimed expenditures in this category did not have an effect on the Federal share. For the recession adjustment period (October 1, 2008, through December 31, 2010), the American Recovery and Reinvestment Act of 2009 provided an estimated $87 billion in additional Medicaid funding based on temporary increases in States' Federal Medicaid assistance percentages.

The State did not properly claim these expenditures for Federal reimbursement because it did not have adequate internal controls to (1) ensure that the claimed amounts were based on actual Medicaid expenditures, (2) prevent or detect claims for duplicate payments, and (3) report expenditures correctly on the Form CMS-64.

We recommended that the State (1) refund $5.2 million to the Federal Government and (2) strengthen internal controls to ensure that amounts claimed for Federal reimbursement are based on actual Medicaid expenditures, prevent and detect claims for duplicate payments, and correctly report Medicaid expenditures on the Form CMS-64. In comments on our draft report, the State described actions that it had taken to address our recommendations.

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