The state Division of Medicaid could face an unwelcome expenditure, following a federal audit’s findings that the agency, in error, claimed $21.2 million in unallowable reimbursements from the U.S. Department of Health and Human Services over a three-year period.
The report released by the Office of Inspector General last month recommends the state refund that amount to the federal government.
The review centers on administrative costs submitted for the state’s school-based Medicaid program for the fiscal years 2010-2012. Under the program, states can be reimbursed for certain services carried out at schools such as identifying and enrolling potentially eligible children in Medicaid. Mississippi’s school-based program is administered by the state Department of Education, and the years in question predate current state Superintendent Carey’s Wright’s tenure.
According to the report, for the 2010-2012 fiscal years, Mississippi claimed roughly $42.4 million in administrative, school-based Medicaid costs. The state sought a federal match just shy of 50 percent, or roughly $21.2 million.
The review cited findings of duplication on participation lists and improperly documented employee schedules.
The state Division of Medicaid refuted the findings, noting it had coordinated with the Centers for Medicaid and Medicare in the past to ensure it was in compliance with the program’s guidelines.
In their report, federal auditors also faulted the state for not submitting a cost allocation plan that would detail the steps the state would take to determine the costs of running the program. That amount would then be reported as claims for reimbursement.
The findings note that the review was triggered in part because the state lacked the approved plan.
In 2010, a plan was submitted by the state to the Centers for Medicaid and Medicare on conditional approval. One of the requirements was for state officials to submit an amendment explaining the method of allocating administrative costs for the programs. The state did not submit proper documentation until Sept. 30, 2013 — almost three years later.
A second amended plan was submitted in December 2016, almost six years later.
Auditors also faulted the state’s sampling method of allocating costs, calling the process “statically invalid.”
MDE used a private vendor to determine costs and auditors said the contractor did not store the information used for generating random numbers.
“Because the state agency did not always have documentation to support its claims., the costs it claimed did not comply with federal requirements,” the report reads.
In a letter to the inspector general, Mississippi Medicaid Executive Director David Dzielak acknowledged the state’s initial delay in submitting its plan but noted it was granted retroactive approval. The idea is this would override auditor’s findings that the state did not have a plan at the pace at the time. The state also said it believed its method of cost allocation to be statistically accurate.
“It is important to note that CMS worked for months with the State on the methodology, approved the “Mississippi School Based Administrative Claiming Guide”, approved the submission of the questioned costs on the CMS-64 (the state’s quarterly expense report), and approved payment of these expenditures,” Dzielak wrote in his letter.
He also noted his department opted not to employ a statistician to defend the program’s expenses, explaining that another state cited by the Inspector General had hired a statistician that found the state’s results valid, however, the conclusion was still rejected by auditors.
A spokesperson for Mississippi Medicaid said the division will coordinate with the MDE to provide a formal, written to the Department of Health and Human Services Action Official at the Centers for Medicare and Medicaid Services, which oversees the school-based administrative claiming program and will make the final decision on whether any costs should be recouped.
Mississippi is not the only state to receive a reproval from the inspector general for an alleged snafu involving school-based administrative costs.
Last year federal auditors reprimanded North Carolina and Alabama for similar matters.
Medicaid, which serves one in four Mississippians, is one of the largest expenditures in the state’s general budget. Lawmakers appropriated roughly $918.7 million for the upcoming 2018 fiscal year. Still, agency leaders say the department faces a deficit for the current fiscal year, a result of state budget cuts and shortfalls for previous budget requests.