Review of Michigan's Reporting Fund Recoveries for State Medicaid Programs on the Form CMS-64 for Federal Fiscal Years 2008 and 2009

For Federal fiscal years 2008 and 2009, we estimated that Michigan did not report Medicaid overpayments totaling $2.3 million ($1.3 million Federal share) in accordance with Federal requirements. The State also did not report all Medicaid overpayments within the 60-day time requirement. Federal law requires States to refund the Federal share of a Medicaid overpayment, and Federal regulations require States to refund the Federal share of an overpayment to a provider at the end of the 60-day period following the date of discovery, whether or not the State has recovered the overpayment. Because the State did not report some overpayments and was not timely in reporting others, the Federal Government incurred a potentially higher interest expense.

We recommended that the State (1) include unreported Medicaid overpayments of $2.3 million on Form CMS-64 and refund $1.3 million to the Federal Government and (2) develop and implement internal controls to correctly report and refund the Federal share of identified Medicaid overpayments on Form CMS 64. The State concurred with our recommendations.