Review of Kansas's Mental Health Center Medicaid Administrative Cost for the Quarters Ended December 31, 2002, and March 31, 2003

EXECUTIVE SUMMARY:

Our objective was to determine whether the State agency claimed mental health center (MHC) Medicaid administrative costs for the quarters that ended December 31, 2002, and March 31, 2003, in accordance with applicable Federal requirements. We found that the State agency did not claim MHCs Medicaid administrative costs in accordance with applicable Federal requirements. Specifically, (1) the State agency used a statistically invalid random moment time study to allocate costs because it had inadequate oversight and the system did not have adequate capacity to process all of the time studies; (2) the State agency inappropriately claimed 75 percent Federal reimbursement instead of 50 percent for activities that did not require skilled professional medical personnel expertise because of a weakness in the claim calculator; (3) the State agency's claim for the quarter that ended March 31, 2003, was calculated by MAXIMUS with transposed time study percentages because the State agency had inadequate oversight to ensure claimed amounts were accurate; and (4) the State agency included improper amounts reported by some of the MHCs because it had inadequate oversight and did not adequately train staff at the MHCs. We recommended that the State agency work with CMS to resolve the $3,060,098 in Federal reimbursement that we set aside. The State agency concurred with the findings and the recommendation.