Review of Illinois' Prompt Pay Compliance Under the American Recovery and Reinvestment Act of 2009 From January 1, 2009, Through September 30, 2009

Our review found that Illinois did not always comply with the prompt pay requirements for receiving the increased Federal medical assistance percentage (FMAP) under the American Recovery and Reinvestment Act of 2009 (Recovery Act). As a result, it improperly received approximately $2.5 million in increased FMAP for the period February 18, 2009, through September 30, 2009. The State agency's initial prompt pay calculations included several inaccuracies related to the 30/90-day prompt pay requirements and the inclusion or exclusion of certain claims in the daily prompt pay compliance calculation. In addition, the State agency failed to adjust the Quarterly Medicaid Statement of Expenditures for the Medical Assistance Program (Form CMS-64) for the quarter ended June 30, 2009, for expenditures not eligible for increased FMAP.

Pursuant to the Social Security Act, the Federal Government pays its share of a State's medical assistance expenditures under Medicaid based on the FMAP, which varies depending on the State's relative per capita income. For the recession adjustment period (October 1, 2008, through December 31, 2010), the Recovery Act provides an estimated $87 billion in additional Medicaid funding based on temporary increases in States' FMAPs.

We recommended that the State (1) refund $2.5 million to the Federal Government for unallowable increased FMAP and (2) ensure that calculations are performed in accordance with the prompt pay requirements. The State agreed that it had applied an incorrect prompt pay standard and incorrectly excluded or included certain prompt pay claims. To cover all corrections, State officials said that they made an adjustment of $2.5 million and reported it on the December 2009 CMS-64.