Review of Medicaid Claims for 21 to 64 Year Old Residents of Private 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 all medical services made on behalf of 21 to 64 year old residents of private psychiatric hospitals that are institutions for mental diseases (IMD).  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 those aged 21 at admission.  As a result, FFP totaling $555,341 was improperly claimed for IMD residents at the 27 private psychiatric hospitals included in our audit.  In addition to the implementation of effective internal controls, we recommended a financial adjustment for $555,341.