Report Materials
Why OIG Did This Audit
- Collections of Medicaid expenditures, such as overpayments recovered, refunds, and similar receipts, decrease the amount of Federal funding States receive for the quarter. CMS instructs States to make refunds of the Federal share at the Federal Medical Assistance Percentage (FMAP) at which the original expenditures were reimbursed.
- In response to the COVID-19 pandemic, Congress temporarily increased States’ FMAPs by 6.2 percentage points.
- In a previous audit, we determined that States retained the difference between the Federal share of collections calculated at the increased FMAP authorized by the American Recovery and Reinvestment Act and the Federal share calculated at the regular FMAP and recommended that CMS recoup $25 million in overpayments.
- This audit examined whether 13 selected States accurately calculated the Federal share of collections subject to the increased FMAP.
What OIG Found
- Twelve of the 13 selected States underreported the Federal share of collections by a net $61.8 million because they did not use the correct FMAP or made calculation errors.
What OIG Recommends
We made four recommendations to CMS to improve how States calculate and report Medicaid collections, including States correcting their reporting to return the net $61.8 million in Federal share. The full recommendations are in the report.
CMS concurred with all four recommendations.
25-A-06-024.01 to CMS - Open Unimplemented
Update expected on
06/15/2025
We recommend that the Centers for Medicare & Medicaid Services require the States to correct the reported Federal share of collections that were subject to the increased COVID-19 FMAP by recouping $62,504,429 from the 11 States that underreported the Federal share of Medicaid collections and refunding $711,715 to 1 State that overreported the Federal share of Medicaid collections.
25-A-06-024.02 to CMS - Open Unimplemented
Update expected on
06/15/2025
We recommend that the Centers for Medicare & Medicaid Services emphasize to States that they should consistently follow their procedures for calculating the Federal share of collections, including during periods of increased FMAPs.
25-A-06-024.03 to CMS - Open Unimplemented
Update expected on
06/15/2025
We recommend that the Centers for Medicare & Medicaid Services reinforce with reviewers that they should verify that the increased Federal share for TPL collections was properly supported.
25-A-06-024.04 to CMS - Open Unimplemented
Update expected on
06/15/2025
We recommend that the Centers for Medicare & Medicaid Services revise its policies and procedures for reviewing States' reported collections to include review of States' calculations of the Federal share for all collections.
View in Recommendation Tracker
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Notice
This report may be subject to section 5274 of the National Defense Authorization Act Fiscal Year 2023, 117 Pub. L. 263.