Iowa Did Not Always Make Correct Medicaid Adjustments

The Iowa Department of Human Services (State agency) did not always use the correct Federal medical assistance percentages (FMAPs) when processing claim adjustments reported to the Centers for Medicare & Medicaid Services. Of the 1.1 million claims we reviewed, the State agency processed 798,000 claims using the correct FMAPs. However, a portion of the Federal share for the remaining 257,000 claims was paid using the incorrect FMAPs. As a result, the State agency received $714,000 more in Federal reimbursement than it was entitled to. These errors occurred because the State agency did not have adequate internal controls to process claim adjustments in accordance with Federal requirements.