Office of Inspector General's Partnership Plan - Commonwealth of Kentucky, Office of Public Accounts' Report on Post Payment Review of Clinical Laboratory Services

EXECUTIVE SUMMARY:

This review was made by the Kentucky Auditor of Public Accounts (State auditors) and was conducted as part of the Inspector General's partnership efforts with States to expand audit coverage of the Medicaid program. The State auditors' final report points out that the State Department for Medicaid Services did not have adequate procedures or controls to ensure that reimbursement for Medicaid clinical laboratory tests did not exceed amounts allowed by the Medicare program. As a result, the auditors estimated the Department for Medicaid Services made potential overpayments of about $2.3 million ($1.6 million Federal share) to providers during Calendar Years 1994-1996. In addition to procedural improvements, the State auditors recommended the Department for Medicaid Services pursue recovery of the $2.3 million in overpayments and make adjustments to the Federal share. The Department for Medicaid Services generally agreed with recommendations made by the State auditors.