Follow-up Audit of the Health Care Financing Administration's Resolution of an Office of Inspector General Audit Related to Two Westchester County Institutions for Mental Diseases

EXECUTIVE SUMMARY:

A prior audit report recommended the disallowance of approximately $17.8 million because, contrary to Federal regulations, the State claimed reimbursement for individuals aged 21 to 64 in facilities that were actually institutions for mental diseases. In addition to a financial adjustment and procedural changes, we recommended that the State identify additional inappropriate claims for periods prior to and subsequent to our original audit period. The Health Care Financing Administration (HCFA), due to State appeal of the original disallowance and staffing problems was unable to resolve and close this last recommendation, and requested our help in calculating the additional unallowable payments. We provided HCFA with information showing additional unallowable payments of approximately $20.7 million (Federal share). We recommended that the HCFA utilize this information to take all necessary action to adjudicate the above final recommendation from the original audit report. The HCFA concurred.