Illinois' Federal Medicaid Withdrawals Were Supported by Net Expenditures for Fiscal Years 2010 Through 2012

The Federal Medicaid funds totaling $23.3 billion that the Illinois Department of Healthcare and Family Services (State agency) obtained for FYs 2010 through 2012 were supported by net expenditures. However, the State agency overdrew Medicaid funds from its main Medicaid Payment Management System (PMS) accounts for most quarters because its withdrawal methodology was imprecise. The State agency could not immediately repay the overdrawn amounts because the funds were used for purposes other than Medicaid. Additionally, the State agency did not always withdraw Federal funds from the appropriate PMS accounts because of a faulty procedure and other misclassifications. The withdrawals caused the balances in the accounts to be wrong, so the State agency had to transfer large amounts of Federal funds to correct those balances.