Connecticut Claimed Unallowable Medicaid Payments for Targeted Case Management Services Provided to Individuals With Chronic Mental Illness

The Connecticut Department of Social Services (State agency) did not always claim Federal Medicaid reimbursement for Targeted Case Management (TCM) services in accordance with Federal and State requirements. Specifically, the monthly payment rates that the Department of Mental Health and Addiction Services calculated included costs that (1) had already been accounted for in a different service cost base and, therefore, should not have been included in the payment rate calculation or (2) were overstated. The State agency also included potentially unallowable costs in its payment rate calculations, which may have overstated its claims for Federal Medicaid reimbursement.

We recommended that the State agency (1) refund $958,000 to the Federal Government; (2) provide additional documentation to the Centers for Medicare & Medicaid Services (CMS) that shows how much of the $43 million in potentially unallowable costs is allowable or refund $23 million (Federal share) to the Federal Government; (3) adjust future payment rates for TCM services and work with CMS to determine the unallowable Medicaid payments that should be refunded to the Federal Government; (4) establish controls to ensure that the payment rate methodology used to claim Medicaid reimbursement for TCM services is in accordance with Federal and State requirements; and (5) improve controls used to detect and prevent duplicate payments.

In written comments on our draft report, the State agency concurred with our first, third, fourth, and fifth recommendations but did not fully concur with our second recommendation. In response to the State agency's comments, we maintain that the State agency should provide additional documentation to CMS that shows how much of the $43 million in potentially unallowable costs is allowable or refund $23 million (Federal share) to the Federal Government.