Review of Medicaid Fee-For-Service Payments for Beneficiaries Enrolled in Medicaid Managed Care

Through a computerized data match, we identified $1,030,416 in fee-for-service (FFS) payments for beneficiaries enrolled in Medicaid managed care organizations (MCOs) during State fiscal year 2001.  A detailed review of $554,246 of the FFS claims found unallowable FFS and MCO payments of $34,168 (federal share $20,165).  Section 447.45(f) of 42CFR requires State plans to conduct prepayment reviews to verify that claims do not duplicate or conflict with other received claims.  We found that Medicaid claims processing edits in place to prevent payment of FFS claims for managed care enrollees were bypassed.  We recommended a refund of the identified overpayments, a review of the remaining FFS payments for MCO enrollees and improvements to internal controls.  State officials generally disagreed with our recommendations.