Review of Medical and Ancillary Medicaid Claims for 21 to 64 Year Old Residents of State Psychiatric Hospitals in Texas that are Institutions for Mental Diseases

EXECUTIVE SUMMARY:

The objective of this review was to determine if controls were in place to effectively preclude the Texas Department of Health (TDH) from claiming Federal financial participation (FFP) under the Medicaid program for 21 to 64 year old residents of State operated psychiatric hospitals that are institutions for mental diseases (IMDs).  We found that for the period September 1, 1997 through August 31, 2000, TDH improperly claimed FFP for medical and ancillary services for IMD clients between the ages of 22 to 64, and for those aged 21 at admission. As a result, FFP totaling $462,551 was improperly claimed at the nine State hospitals included in our audit. While State officials stated that it would recover payments for the claims that were improperly paid, our review focused on the improper claiming of FFP by the State Medicaid agency, not on inappropriate payments received by providers. Therefore, the improperly claimed FFP associated with this audit, as well as any identified subsequently, should be refunded to the Federal Government irrespective of whether or not payments are recouped from providers.