Review of Family Planning Service Costs Claimed by Virginia's Medicaid Managed Care Program

EXECUTIVE SUMMARY:

Our objective was to determine whether Virginia claimed family planning service costs under its Medicaid managed care program in accordance with its methodology and Federal statutes, regulations, and guidelines.  Virginia did not claim family planning service costs in accordance with its methodology.  Virginia included the following ineligible costs in the numerator of its family planning factor calculations:  (1) family planning service costs for beneficiaries not eligible to enroll in managed care and not represented in the denominator; and (2) services that did not qualify as family planning.  As a result, Virginia overstated its claims for family planning service costs by $3.7 million.  By claiming these costs at the enhanced family planning rate of 90 percent, rather than its regular Federal share of about 50 percent, Virginia received approximately $1.4 million in unallowable Federal reimbursement.  We recommended that Virginia refund to the Federal Government $1,388,506 million in family planning service costs incorrectly claimed between April 2001 and March 2004.  We also recommended that Virginia apply the audited factor of 1.43 percent for claims after March 2004 and refund the Federal share of any overpayments.  Virginia concurred with both recommendations.