The Centers for Medicare & Medicaid Services Collected the Majority of Medicaid Overpayments but Millions Remain Uncollected

Our objective was to determine whether CMS had collected sustained Medicaid overpayments identified in selected OIG audit reports. As of December 2012, CMS reported collecting $987.5 million of the $1.2 billion in Medicaid overpayments that it had sustained in the 147 audit reports covered by our review. However, CMS had not collected the remaining $225.6 million. The uncollected amount related to overpayments that OIG had identified in 10 audit reports that the States had not agreed to refund. In addition, CMS could not document that $7.2 million that it reported as collected had been collected.

CMS had not collected the $225.6 million in overpayments because it had not always proceeded with the collection process in a timely manner. Also, CMS could not document that $7.2 million it reported as collected had been collected because it did not maintain adequate supporting documentation. Additionally, CMS did not ensure that the States reported Medicaid overpayments on the correct lines of the Form CMS-64 to facilitate CMS tracking of recoveries.

We recommended that CMS (1) collect the remaining $225.6 million that is due the Federal Government, (2) review and address delays in resolving OIG audit recommendations and promptly pursue corrective actions, (3) maintain adequate documentation to support the collection of overpayments in accordance with OMB Circular A-50 and CMS Standard Operating Procedures, and (4) educate the States about their responsibility to report overpayments on the correct line of the CMS-64 to improve oversight of the reporting process. CMS concurred with our second, third, and fourth recommendations and provided information on actions that it had taken or planned to take to address them. CMS partially concurred with our first recommendation.