Review of Medicaid Upper-Payment-Limit Requirements for Kansas Nursing Facility Reimbursement

EXECUTIVE SUMMARY:

The objective of this review was to determine whether Kansas calculated the upper payment limit (UPL) for non-State government nursing homes in accordance with Federal regulations and the approved State plan amendment.  In general, Federal funds are not available for Medicaid payments that exceed the UPL.  However, during a limited period of time, called a transition period, Kansas was eligible to receive Medicaid payments that exceeded the UPL by a determined amount.  We found that Kansas followed Federal regulations and its State plan amendment when calculating the UPL for non-State government nursing homes.  Contrary to Federal regulations, however, Kansas increased the Medicaid payment amount that exceeded the UPL during its transition period.  As a result, Kansas overclaimed expenses by $58,303,091 ($35,004,284 Federal share).  We recommended that Kansas reduce claimed expenses on its quarterly expenditure reports by $58,303,091 ($35,004,284 Federal share) for the period April 1, 2001, through September 30, 2002.  Kansas concurred with our recommendation.