Audit of California Department of Health Services Recovery of Medicaid Third Party Liability Payments for the Period July 1, 1988 Through June 30, 1992

This final audit report points out that the State agency did not give the Federal Government full financial credit for casualty third party liability (TPL) recoveries. State laws allowed recipients to keep, in part, settlement and award amounts that Federal laws require be used to reimburse Medicaid for medical expenses paid on behalf of the recipients. We recommended a financial adjustment for $7.6 million. We also recommended that the State agency establish procedures to ensure that the Federal Government is given full credit for TPL settlements and awards in accordance with Federal requirements.