Review of Missouri Provider Tax

EXECUTIVE SUMMARY:

Missouri's provider tax for State fiscal year (FY) 2004 did not comply with the requirements for a permissible provider tax outlined in Federal laws and regulations and the Medicaid Partnership Plan. Missouri did not have policies and procedures to ensure that its provider tax program complied with Federal laws and regulations and the plan. As a result, Missouri's provider tax may have been impermissible. 

We recommended that Missouri: (1) submit to the Centers for Medicare and Medicaid Services (CMS) a separate waiver test for each class of service for State FY 2004; (2) refund $8,235,595 to the Federal Government; (3) submit to CMS a separate waiver test for each class of service for State FYs 2005 and 2006; (4) refund Federal reimbursement for the unallowable tax amounts paid by the hospitals not included in our audit and for unallowable Federal reimbursement for State FYs 2005 and 2006; (5) notify CMS of any State changes to the provider tax program; and (6) develop policies and procedures to ensure that the provider tax program complies with all Federal and negotiated requirements for provider taxes when completing the waiver tests. Missouri did not agree with the findings or the recommendations.