Review of Medicaid Support for Graduate Medical Education in the State of Michigan

EXECUTIVE SUMMARY:

Our objectives were to determine whether (1) Michigan followed the approved State plan in administering the Medicaid graduate medical education program and (2) intergovernmental transfers included any program funds.  We found that contrary to the State plan, Michigan used $1.7 million ($955,060 Federal share) in graduate medical education funds for other Medicaid services.  Also, rather than making the required semimonthly payments, the State paid the majority of the total funds during the first 32 days of the fiscal year.  In addition, the State did not ensure that hospitals accounted for their use of funds by submitting required annual reports.  Concerning our second objective, we found that intergovernmental transfers did not involve graduate medical education funds.

We recommended that Michigan report a $955,060 financial adjustment, adhere to the payment method in the approved State plan, and ensure that hospitals comply with reporting requirements of the State plan.  The State did not agree with the financial adjustment, but did agree with the procedural recommendations.