Review of Montana's Accounts Receivable System for Medicaid Provider Overpayments for the Period October 1, 2002, through September 30, 2004

EXECUTIVE SUMMARY:

This report is part of a multistate audit.  Our objective was to determine whether the State agency, Montana Department of Public Health and Human Services, reported Medicaid provider overpayments in accordance with Federal requirements.  The State agency did not report 195 Medicaid provider overpayments totaling $3,685,465 ($2,731,303 Federal share) in accordance with Federal requirements.  In addition, the State agency delayed reporting 68 overpayments totaling $1,278,197 ($944,216 Federal share) within required timeframes, resulting in $66,526 of higher interest expense to the Federal Government. 

We recommended that the State agency: (1) include on the CMS-64 the unreported overpayments, the uncollected portion of overpayments that were settled at reduced amounts, and the unreported MFCU-identified overpayments and refund $2,731,303 Federal share; (2) determine the value of overpayments identified after our audit period and include them on the CMS-64; (3) reduce overpayments only when it can support that providers are bankrupt or out of business; (4) develop policies and procedures to ensure that overpayments are reported on the CMS-64 in accordance with Federal regulations; and (5) report all future overpayments within 60 days.  The State agency agreed.