Audit of Iowa's Adult Rehabilitation Services Program

EXECUTIVE SUMMARY:

The objective of this audit was to determine whether the State's claims for adult rehabilitation services met Federal and State Medicaid reimbursement requirements.  Of the 100 adult rehabilitation services claimed in our sample, 65 were unallowable because documentation was missing or inadequate, services were nonrehabilitative, a conflict of interest existed because the provider both authorized and rendered the services, and/or no services were provided or the beneficiaries were not present.  These errors occurred because the State lacked adequate internal controls over the adult rehabilitation services program to ensure that services claimed for Medicaid reimbursement met applicable requirements.  We estimated that $6,244,154 in Federal funds that the State claimed for Federal fiscal year 2002 was unallowable.  We recommended that the State refund the $6,244,154 to the Federal Government and strengthen policies and procedures to ensure that services claimed for Medicaid reimbursement are directed exclusively to the beneficiary's rehabilitative needs and meet other Federal and State requirements.  The State generally concurred, agreeing overall with 59 of the 65 claims found in error.