Review of Nevada's Medicaid School-Based Administrative Expenditures for Calendar Years 2003 and 2004

EXECUTIVE SUMMARY:

Our initial objective was to determine whether the State agency's claims for Medicaid school-based administrative expenditures were allowable and supported. Because of information that we discovered while reconciling these expenditures to supporting documentation, we added another objective: to determine whether the State agency adequately safeguarded confidential health data that it shared with its consultant, MAXIMUS, Inc. (MAXIMUS). 

For calendar years 2003 and 2004, the State agency claimed $5,793,236 (Federal share) for Medicaid school-based administrative expenditures that were not allowable. In addition, the State agency claimed $775,180 (Federal share) for Medicaid school-based administrative expenditures for the summer quarter of 2004. Without a timestudy for the summer quarter of 2004, we are unable to express an opinion on the $775,180 claimed. Finally, the State agency allowed confidential Medicaid beneficiary health data to be released to MAXIMUS without written assurance that the information would be adequately safeguarded. 

We recommended that the State agency: (1) refund $5,793,236 to the Federal Government, (2) review claims for Medicaid school-based administrative expenditures after our audit period and refund the Federal share of any unallowable costs, (3) strengthen its policies and procedures to ensure that it claims Federal funds only for Medicaid school-based administrative expenditures that are allowable and supported, (4) require the school district to conduct timestudies during summer quarters when employees perform Medicaid school-based administrative activities and work with the Centers for Medicare & Medicaid Services to determine the allowability of $775,180, and (5) ensure that confidential health data are safeguarded pursuant to Federal law and regulations. The State agency generally agreed with our recommendations and stated that it was actively engaged in implementing all of them.