Review of Child Delivery Claims and Newborn Claims Included in the Kansas Medicaid Family Planning Program

None of the 2,781 family planning claims related to child delivery and newborn services that were submitted by providers and claimed by the Kansas Health Policy Authority (the State agency) at the enhanced 90-percent Federal financial participation rate (90-percent FFP rate) from July 1, 2005, through June 30, 2009, were allowable pursuant to Federal requirements. As a result, the State agency received approximately $2.4 million in unallowable Federal reimbursement. Federal requirements make provisions for various specified services, including family planning, to be reimbursed at higher rates of FFP.

We recommended that the State agency (1) refund $2.4 million to the Federal Government; (2) determine the amount of Federal Medicaid funds that were improperly reimbursed at the 90-percent FFP rate for child delivery and newborn services because they did not qualify as family planning services, both before and after our audit period, and refund that amount to the Federal Government; and (3) ensure that Medicaid Management Information System edits appropriately identify claims that are ineligible for reimbursement at the 90-percent FFP rate.

In written comments on our draft report, the State agency disagreed with our finding and first recommendation and described an alternative method that it used to calculate child delivery and newborn claims. The State agency did not respond to our second recommendation and described corrective actions that it implemented to address our third recommendation. After reviewing the State agency's method of calculating child delivery and newborn claims, we revised the amount of our finding and recommended refund to $2.4 million. We maintain that our findings and recommendations, as modified, remain valid.