Medicaid Enhanced Payments for Illinois State-Employed Physicians for April 1, 2002, Through June 30, 2004

EXECUTIVE SUMMARY:

Our objective was to determine whether the Department of Healthcare and Family Services (the State agency) made enhanced payments for services provided by physicians employed by the University of Illinois at Chicago College of Medicine (UIC) and the Southern Illinois University School of Medicine (SIU) in accordance with the approved State plan amendment (SPA) and Federal regulations.  

The State agency generally made enhanced payments for services provided by UIC and SIU physicians in accordance with its SPA and Federal regulations.  However, the State agency overpaid the universities $304,726 ($152,363 Federal share) due to a computer program error used to calculate the enhanced payment for 8,844 claims within a portion of our audit period.  The computer program error occurred on claims that had a third party liability payment that exceeded the cost of services.  We recommended that the State agency refund the overpayment of $152,363 to the Federal Government and correct the computer program error that caused the overpayments and ensure that claims with third party liability payments that exceed the cost of services do not receive a standard Medicaid fee or an enhanced payment.  The State agency concurred with the findings and recommendations.