Review of State Fiscal Year 2002 Medicare Upper Payment Calculations and Payments: Kentucky Medicaid Agency

EXECUTIVE SUMMARY:

This report points out that overall, Kentucky's inpatient hospital, outpatient hospital, and skilled nursing facility upper payment limit (UPL) payments were made within the terms of the approved State plan amendments.  In addition, Kentucky's methodologies for the UPL calculations were reasonable.  However, some minor computational errors resulted in UPL overpayments of $75,748 (Federal share $52,926) associated with its inpatient hospital UPL calculations and $227,916 (Federal share $159,405) associated with its outpatient hospital UPL calculations.  We recommended that Kentucky reimburse the Federal Government $212,331 for the Federal share of the overpayments.  We also recommended that Kentucky improve procedures to review the UPL calculations for accuracy.