Review of Medicaid Claims for Patients Under Age 21 in State-Operated Psychiatric Hospitals That Were Institutions for Mental Diseases in California During the Period July 1, 1997 Through February 28, 2001

EXECUTIVE SUMMARY:

The objective of this audit was to determine if controls were in place to preclude California from claiming Federal Medicaid funds for medical services, except inpatient psychiatric services, provided to residents under age 21 in State-operated psychiatric hospitals that were institutions for mental diseases.  We found that California improperly claimed Federal funds because it did not have controls to prevent claims for such medical services.  As a result, from July 1, 1997, through February 28, 2001, we estimate that California improperly claimed $380,920 ($190,460 Federal share) for medical services.  We recommended that California (1) refund $190,460 to the Federal Government; (2) implement controls to prevent Federal funds from being claimed for such medical services; and (3) identify and refund to the Federal Government any Federal Medicaid funds improperly claimed after February 28, 2001.