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California Improperly Claimed Federal Medicaid Reimbursement for Certain Nonemergency Services

Qualified aliens are generally not permitted to receive Federal Medicaid benefits for 5 years from the date they enter the United States with qualified alien status. States are required to have a verification system to meet requirements for receiving Federal reimbursement for services provided to qualified aliens. To comply with those requirements, the California Department of Health Care Services (State agency) created the quarterly alien claiming adjustment report (adjustment report) in its Medicaid Management Information System (MMIS) to identify claims for services provided to qualified aliens who had not met, and were not otherwise excepted from, the 5-year waiting period. The State agency is not permitted to claim Federal reimbursement for these services.

The State agency did not correctly identify all nonreimbursable claims for nonemergency services provided to qualified aliens for select quarters in State fiscal years 2010 through 2014. Specifically, the State agency's MMIS did not identify all claims for its adjustment reports for the audit period, for which Federal reimbursement was unallowable. The MMIS error occurred when claims were approved for payment in one quarter and paid in a subsequent quarter. As a result, the State agency claimed $9.9 million in unallowable Federal Medicaid reimbursement.

We recommended that the State agency (1) refund $9.9 million to the Federal Government, (2) identify and refund the Federal share of overpayments for any quarters in State fiscal years 2015 and 2016 in which claims were approved for payment in one quarter and paid in a subsequent quarter, and (3) ensure that the MMIS correctly identifies all nonreimbursable claims for nonemergency services provided to qualified aliens.

In written comments on our draft report, the State agency partially agreed with our first recommendation. The State agency agreed with our second and third recommendations and provided information on actions that it had taken or planned to take to address those recommendations.

Copies can also be obtained by contacting the Office of Public Affairs at Public.Affairs@oig.hhs.gov.

Download the complete report.

Office of Inspector General, U.S. Department of Health and Human Services | 330 Independence Avenue, SW, Washington, DC 20201