Michigan Improperly Received Medicaid Reimbursement for School-Based Health Services

Michigan Department of Health and Human Services (the State agency) did not always comply with Federal requirements when using a random moment time study (RMTS) to claim direct medical service costs related to Medicaid school-based health services (SBHS). Specifically, the RMTS methodology did not meet acceptable standards because the sample universe from which the State agency selected the sample items was incomplete. The sample universe did not contain all the job titles of the employees whose salaries and wages were allocated on the basis of the sample results. As a result, the State agency received unallowable Federal reimbursement totaling $954,000 for services provided during State fiscal year 2011.

We recommended that the State agency (1) refund $954,000 (Federal share) to the Federal Government for unallowable SBHS costs and (2) strengthen policies and procedures to monitor the SBHS program and ensure that it claims all SBHS costs in accordance with applicable Federal and State requirements. In written comments on our draft report, the State agency concurred with our recommendations and provided details about corrective actions.