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OIG audit finds Indiana overstated available UPL payments

Compliance Monitor, November 2, 2005

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The OIG has recommended that Indiana refund $3.2 million, after investigators determined that the state overstated amounts available for the upper payment limit (UPL) payments to non-state government hospitals and nursing homes.

The OIG determined that the state overstated available UPL payments by about $2.2 million in fiscal year 2001 and by about $4.3 million in fiscal year 2002. The calculations were contrary to state plan provisions because they included unpaid claims rather than Medicaid payments, according to the OIG.

The state disagreed with the OIG's position and did not address its use of an incorrect cost-to-charge ratio or the overstatement of graduate medical education expenses, according to the OIG.

The OIG continues to believe that the state's Medicaid UPL calculations should not include Medicaid unpaid claims.

To conduct the audit, the OIG reviewed Indiana's UPL calculations, UPL payments, and supporting documentation. The OIG also reviewed facility-specific documentation for 10 hospitals and five nursing homes.

Click here to read the audit report, "Review of Indiana's Medicaid Upper Payment Limits for State Fiscal Years 2001 and 2002," (A-05-03-00068) issued Sept. 30, 2005.

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