Review of Medicaid Claims for Proportionate Share Payments to Public Providers by the State of Nebraska

Medicaid regulations allow States to establish payment methodologies that provide for enhanced payments (in addition to the regular Medicaid payments) to non-State-owned government providers, such as city and county-owned nursing facilities.  This final report points out Nebraska did not determine such payments correctly for fiscal years 1998 and 1999.  The approved State plan required such payments be computed based on the difference between allowable Medicare payment rates and actual Medicaid payment rates to nursing facilities.  The allowable Medicare payment rate for each facility was to include a wage index factor.  Because the State did not use the wage index factor in their calculations of the allowable Medicare payment rates, the State claims were overstated by about $44 million (Federal share).  We recommended that Nebraska refund the $44 million, and use the wage index factor in the calculation of future enhanced payments.