Review of the Medicaid Program's Use of Consultants on a Contingency Fee Basis

EXECUTIVE SUMMARY:

Our objective was to determine the reasonableness and allowability of Medicaid costs claimed for reimbursement by the North Carolina Department of Health and Human Services (the State agency) as a result of contingency fee arrangements with consultants. The State agency overstated its claims for reimbursement by $125,361 (Federal share) for cost report adjustments owing to the use of misclassified expense data during computation of the claim.

We recommended that the State agency refund $125,361. The State agency agreed.