Review of Texas's Accounts Receivable System for Medicaid Provider Overpayments

EXECUTIVE SUMMARY:

Our objective was to determine whether the State of Texas (State) reported Medicaid provider overpayment adjustments and reclaiming adjustments in accordance with Federal requirements.  The State did not report 48 overpayment adjustments totaling approximately $1.91 million (approximately $1.21 million Federal share) in accordance with Federal requirements.  This resulted in potentially higher interest expense to the Federal Government of approximately $19,964.  The untimely overpayment adjustments occurred because the State did not have reconciliation procedures in place to verify that all reportable Medicaid provider overpayments were included on its CMS-64s [Quarterly Medicaid Statement of Expenditures for the Medical Assistance Program, Form CMS-64] within the required timeframe.  The State also did not have written policies and procedures in place to ensure compliance with Federal requirements related to submitting reclaiming adjustments.  We recommended that the State:  (1) continue its reconciliation procedures to ensure that future overpayments are reported timely on the CMS-64s in accordance with Federal criteria; and (2) verify that the written policies and procedures that it is currently developing ensure that future reclaiming adjustments are reported in accordance with Federal requirements.  The State agreed.