Health Reform WK-EDGE Colorado may have incorrectly claimed millions on behalf of new adult group Medicaid beneficiaries
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Monday, September 14, 2020

Colorado may have incorrectly claimed millions on behalf of new adult group Medicaid beneficiaries

By Sandra J. Stoll, JD

An audit by the OIG revealed that the State of Colorado did not always comply with Federal and State requirements when claiming Federal Medicaid reimbursement for Medicaid services provided to beneficiaries enrolled in the new adult group.

The HHS Office of Inspector General (OIG) conducted an audit of services provided from January 1, 2014, through September 30, 2015 for 579,925 "new adult" beneficiaries for whom the Colorado Department of Health Care Policy and Financing (State agency) received enhanced Medicaid reimbursement totaling $2.2 billion. The objective of the audit was to determine whether the State agency complied with Federal and State requirements when claiming reimbursement (OIG Report , No. A-07-19-02822, September 2020).

Background. The Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) established enhanced Federal reimbursement rates for services provided to nondisabled, low-income adults without dependent children (new adult group). Concerns arose about the possibility that States could improperly enroll individuals for Medicaid coverage in the new adult group and about the potential for improper payments.

To identify discrepancies in beneficiaries’ Medicaid eligibility group status, the OIG matched Medicaid claim data from Colorado’s Medicaid Management Information System (MMIS) to eligibility span data provided by the State. To identify beneficiaries enrolled in the new adult group who should have been enrolled in the Transitional Medicaid group, the OIG used MMIS data.

Findings. The audit found that Colorado did not always comply with Federal and State requirements. Specifically, Colorado did not have adequate supporting documentation to substantiate the eligibility of 33,036 beneficiaries. Therefore, Colorado may have incorrectly claimed $4.1 million on behalf of these beneficiaries. In addition, Colorado claimed the incorrect Federal Medical Assistance Percentage (FMAP) for Medicaid payments made on behalf of 6,897 beneficiaries whom it enrolled in the new adult group but who, according to supporting documentation, were eligible for the Transitional Medicaid eligibility group. As a result, Colorado incorrectly received an additional $1.8 million for services that it claimed on behalf of these beneficiaries. Colorado did not have adequate system controls to ensure that its claims for Federal Medicaid reimbursement were adequately supported and were claimed at the correct FMAP.

OIG Recommendations. The OIG recommended that Colorado (1) update its eligibility determination system by implementing an automatically accessible eligibility history to eliminate the need for manual interventions to identify eligibility changes in eligibility status, (2) ensure that the MMIS retains all beneficiary eligibility changes and reconcile the data in the MMIS to the data in its eligibility determination system to determine whether discrepancies in eligibility groups are occurring, and (3) ensure that its systems have automated edits to enroll Transitional Medicaid beneficiaries in the correct eligibility group.

ReportsLetters: OIGReports AgencyNews MedicaidNews NewsFeed

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