Review of State Claims for the Costs of Family Planning Services Provided Through Medicaid Managed Care Programs

EXECUTIVE SUMMARY:

Our objectives were to (1) consolidate the results of our audits of seven States' methodologies for claiming the costs of family planning services provided through Medicaid managed care programs and (2) assess the adequacy of CMS's guidance and practices relative to determining such costs.

Six of the seven States we reviewed inflated the factors or rates used to claim reimbursement for family planning costs at the enhanced 90-percent rate or did not provide documentation to support their calculations as required.  As a result, for $302,902,257 in claims reviewed (Federal share), these States claimed unallowable costs totaling $21,749,383 (Federal share).  We recommended that CMS: (1) issue specific guidance to State agencies, consistent with current Medicaid regulations, to quantify a reasonable portion of the capitation payments attributable to family planning services; (2) establish controls in its review process to ensure that the data States use to quantify family planning costs conform to the proposed methodologies for claiming the enhanced family planning rate; and (3) specify retention requirements for base-year data.  CMS agreed with our first and third recommendations.  We clarified our second recommendation to express our original intent more clearly.