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GOV’T AUDIT INSIDER: Unreported Medicaid overpayments in West Virginia

Healthcare Auditing Weekly, July 26, 2005

West Virginia did not report Medicaid provider overpayments of $3.7 million to CMS because it was waiting to implement changes to its Medicaid Management Information System, according to an OIG audit report. The state also failed to report $3.2 million in overpayments within the required timeframe because of an oversight and because it did not use the correct date of discovery. The untimely and non-reporting also potentially resulted in approximately $20,000 in higher interest expense to the federal government.

The OIG recommends that the state include the unreported overpayments totaling $3.7 on the form CMS-64, refund the federal share of $2.9 million, determine the value of overpayments identified after the audit period that have not been reported, and include them on the CMS-64. The OIG also recommends that West Virginia ensure that all future overpayments are reported within 60 days to avoid the potentially higher interest expense.

During the audit, the OIG did the following:

• Reviewed applicable federal criteria and state laws and regulations

• Gained an understanding of the state agency's procedures for managing provider overpayments

• Interviewed key staff and reviewed records

• Analyzed the four quarterly CMS-64s for fiscal year 2003 along with supporting documentation

• Compared the universe of overpayments obtained from the state agency with the individual overpayments identified by each unit

• Compared the universe of overpayments with the overpayments reported on the CMS-64s to determine whether all identified overpayments were reported

• Calculated the number of days between the actual and required reporting dates for all identified overpayments

• Calculated the potentially higher interest expense to the federal government for those overpayments that were not reported within the required timeframe

Click here to read the audit report, "Review of West Virginia's Accounts Receivable System for Medicaid Provider Overpayments," (A-03-04-00207) issued June 27.

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