Review of Missouri's Determination of Medicaid Disproportionate Share Hospital Eligibility for State-Owned Institutions for Mental Diseases

Our objective was to determine whether the Missouri Department of Social Services (the State) correctly determined State-owned Institutions for Mental Diseases (IMD) to be eligible for Medicaid disproportionate share hospital (DSH) payments for Federal fiscal years (FFY) 2003'2005. 

The State correctly determined seven State-owned IMDs to be DSH eligible for FFYs 2003'2005.  However, the State incorrectly computed the Medicaid Inpatient Utilization Rates (MIUR) for the IMDs because it did not comply with Federal regulations concerning the exclusion of inpatient days related to unallowable age groups and incarcerated individuals.  In addition, the State included unallowable inpatient days related to accounting errors for the FFY 2003'2005 DSH eligibility determination.  The State also lacked adequate controls concerning the acquisition, review and maintenance of contemporaneous documentation to support the MIUR calculations.  As a result, the State could not adequately support its MIUR calculations for State-owned IMDs.  These errors did not cause the MIUR to fall below the 1-percent threshold at any of these State-owned IMDs.  However, we are concerned that the State may in the future overstate the MIURs and, consequently, incorrectly classify one or more IMDs as DSH eligible.

We recommend that the State (1) comply with Federal regulations concerning the exclusion of unallowable inpatient days from the MIUR calculations; and (2) strengthen controls to eliminate accounting error and to acquire, review, and maintain contemporaneous documentation to support the original Medicaid DSH MIUR calculations.  The State neither agreed nor disagreed with our first recommendation and agreed with our second recommendation.