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Gov’t audit insider: Lessons healthcare auditors can learn from school-based service slip-ups

Healthcare Auditing Weekly, April 6, 2004

Iowa school-based Medicare costs: Lessons healthcare auditors can learn

Iowa must remit more than $650,000 that the state improperly received from Medicare for school-based administrative costs, an Office of Inspector General (OIG) audit reveals. Iowa's school-based program claimed hundreds of thousands of dollars in federal financial participation (FFP) without required matching expenditures, and racked up over $20,000 in inappropriate claims from spreadsheet rounding errors.

Healthcare auditors can learn some lessons from the expensive mistakes and mismanagement surfacing in audits of school-based services. During their investigation, auditors:

• Discussed the role that Iowa program officials played and the programs they facilitated
• Reconciled and reviewed records supporting Iowa's FFP claims
• Performed onsite reviews of several lead agencies and sub-agencies
• Discussed procedures for claims preparation with personnel
• Reviewed supporting documentation for select claims
• Reviewed supporting documentation for the determination of the percentage of Medicaid recipients, for indirect costs, for revenue offsets, and for the use of reimbursed funds
• Examined sampling methodologies for determining costs allocated to Medicaid
• Interviewed lead and sub-agency employees to assess their level of training

The auditors also met with Centers for Medicare and Medicaid Services' regional officials to examine their involvement with the Iowa program. Iowa inadequately monitored the program, and did not properly supervise its lead and sub-agencies, the OIG said. Lack of satisfactory monitoring by Iowa gave the OIG no assurance that the claimed FFP was reasonable, or permissible.

Click here: http://oig.hhs.gov/oas/reports/region7/70202099.pdf to view the report called, "Audit of the Iowa Department of Human Services' Claim for Medicaid School-Based Administrative Costs (A-07-02-02099)."

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