State Agencies Claimed Unallowable and Unsupported Medicaid Reimbursements for Services Under the Home and Community-Based Services Waiver Program

In eight previous audits, we identified instances in which State Medicaid agencies (State agencies) did not always comply with Federal requirements in administering their Home and Community-Based Services (HCBS) waiver programs. Specifically, we found that State agencies did not always exclude unallowable room-and-board costs when determining payment rates under the HCBS waiver program, resulting in unallowable Medicaid reimbursement. Our previous audits also conveyed certain other findings that resulted in unallowable and unsupported Medicaid reimbursement. The State agencies did not have adequate controls to ensure that their HCBS waiver programs complied with applicable Federal requirements regarding the need to exclude unallowable room-and-board costs when determining payment rates and to ensure that certain other costs complied with the requirements associated with their HCBS waiver programs. As a result of the inadequate controls regarding unallowable room-and-board costs and certain other unallowable and unsupported costs, the State agencies claimed at least $176.5 million (Federal share) in unallowable and unsupported Federal Medicaid reimbursement for services under their HCBS waiver programs.

We recommended that the Centers for Medicare & Medicaid Services (CMS) (1) share the findings of our HCBS waiver program audits with all State agencies to reinforce Medicaid requirements that prohibit the inclusion of unallowable room-and-board costs when determining payment rates, (2) share (at CMS's discretion) the other findings of our HCBS waiver program audits with all State agencies, and (3) encourage all State agencies to review their procedures for calculating and claiming costs under their HCBS waiver programs. CMS concurred with all of our recommendations and described actions that it had taken or planned to take.