Review of Tennessee's Intergovernmental Transfers

This report points out that Tennessee used the intergovernmental transfers program to maximize Federal reimbursement at little or no cost to the State. Moreover, Tennessee did not use the program funds primarily for the benefit of public nursing homes, for which the program was designed. Also, Tennessee's upper-payment-limit calculations for State fiscal years 2001 and 2002 exceeded the Medicare upper payment limit by $23.7 million. Of this amount, $21.8 million represents an overpayment, and the State had not yet claimed the balance of $1.9 million. OIG recommended financial adjustments. OIG also recommended that Tennessee direct the counties to improve recordkeeping procedures to ensure that no prior Federal funds are included in intergovernmental transfers submitted for Federal matching, and establish review procedures to ensure the accuracy of upper-payment-limit calculations. Tennessee concurred with our recommendations.