Review of Medicaid Claims Made for 21 to 64 Year Old Residents of Institutions for Mental Diseases in Virginia

EXECUTIVE SUMMARY:

The objective of this review was to determine if controls were in place to effectively preclude the Virginia Department of Medical Assistance Services (DMAS) from claiming Federal financial participation (FFP) under the Medicaid program for 21 to 64 year old residents of psychiatric hospitals that are institutions for mental diseases (IMD).  We found that adequate controls were not in place to preclude DMAS from inappropriately claiming FFP.  As a result, from July 1, 1997 through December 31, 2000, DMAS paid Medicaid claims of $2,680,670 including $1,382,079 FFP for 21 to 64 year old residents of IMDs.  We recommended that DMAS:   (1) refund $1,382,079; (2) change the Medicaid Management Information System to deny crossover payments to private IMDs; (3) establish procedures to require State IMDs to report IMD admissions to the Department of Social Services (DSS); and (4) require DSS to suspend Medicaid eligibility for all IMD residents upon entering an IMD.