Follow-up Audit of West Virginia Medicaid Payments for Clinical Laboratory Services

EXECUTIVE SUMMARY:

A previous audit showed that West Virginia overpaid clinical laboratory claims during Calendar Years (CYs) 1993 and 1994. This follow-up audit disclosed that the State still lacked adequate controls to prevent claiming federal financial participation (FFP) for Medicaid clinical laboratory payments in excess of amounts paid by the Medicare program, as required by the State Medicaid Manual. As a result of inadequate internal controls, the State agency overpaid providers $711,323 and should refund the Federal share of $521,660. Additionally, the Federal share of the prior overpayments from CY 1993 and CY 1994 totaling $1,047,789 has not been refunded. We also noted that chemistry unbundling overpayments increased. Projecting the results of our statistical sample we estimate that the State agency overpaid providers $711,323 (Federal share $521,660). Additionally, we determined that the State agency recaptured clinical laboratory overpayments of $995,083, but the FFP on these overpayments was not refunded to the Centers for Medicare and Medicaid Services.