Review of New Mexico's Personal Needs Allowance for Institutionalized Residents for the Period July 1, 2000 through September 30, 2004

EXECUTIVE SUMMARY:

Our objective was to determine whether New Mexico obtained required approval from the Centers for Medicare & Medicaid Services (CMS) before increasing the personal needs allowance for institutionalized residents between July 1, 2000, and September 30, 2004.  From July 1, 2000, through September 30, 2004, the New Mexico Human Services Department (the State agency) increased the monthly personal needs allowance annually; however, it did not obtain approval from CMS to increase the allowance for the period July 1, 2001 through September 30, 2004.  As a result of the unapproved increases, the Federal Medicaid program made $391,651 in additional payments to institutionalized residents.  We recommended the State agency (1) reimburse the Federal government $391,651 and (2) ensure it submits a State plan amendment when making Medicaid program changes, such as increasing the personal needs allowance for institutionalized individuals.  The State agency stated that our report was accurate and our recommendations were reasonable.