Review of Rhode Island's Medicaid Nonemergency Transportation Costs for March 1, 2004, Through May 31, 2005

EXECUTIVE SUMMARY:

The State agency did not claim Medicaid nonemergency transportation (NET) costs in accordance with Federal and State requirements.  Specifically, the State agency's purchase of monthly bus passes was not cost effective based on beneficiaries' use of medical services.  From March 2004 through May 2005, bus pass recipients averaged 1.5 medical services per month for months in which they received a pass.  The less costly purchase of 10-ride bus passes could have saved at least $9.8 million ($4.9 million Federal share) during our 15-month audit period.  In addition, the State agency's claim included the costs of approximately 8,700 bus passes for beneficiaries of two non-Medicaid State programs.  As a result, the State agency overstated its claim for NET costs by $386,452 ($193,226 Federal share). 

We recommended that the State agency (1) either refund $4.9 million (Federal share) for NET costs claimed for monthly bus passes or provide documentation to show that the passes were the most cost-effective means of providing NET; (2) refund $193,226 (Federal share) in unallowable NET costs claimed for beneficiaries of two non-Medicaid State programs; (3) in the absence of documentation demonstrating that monthly bus passes were the most cost-effective means of providing NET to Medicaid beneficiaries, review NET costs for bus passes reimbursed after our audit period and refund the excess NET costs to the Federal Government; and (4) establish policies and procedures to ensure that it complies with Federal requirements and the State plan for claiming NET costs.  The State agency agreed with our second recommendation but disagreed with the other recommendations.  Nothing in the State's response has caused us to alter our recommendations.

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