Federal government seeks $88 million refund from Alabama Medicaid Agency

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State Public Health Officer Don Williamson is overseeing efforts to overhaul how the state's Medicaid Agency delivers services.  (Montgomery Advertiser, Amanda Sowards)

State Public Health Officer Don Williamson is overseeing efforts to overhaul how the state’s Medicaid Agency delivers services. (Montgomery Advertiser, Amanda Sowards)

The U.S. Department of Health and Human Services’ Inspector General says the Alabama Medicaid Agency needs to return $88.1 million in funding, due to what the department said was an incorrect way of calculating the number of enrolled children in fiscal years 2009 and 2010.

Dr. Don Williamson, the head of an effort to revamp the way Medicaid is delivered in the state, said they planned to meet with the Centers for Medicare & Medicaid Services within the month to attempt to resolve the issue. Refunding the money, he said, would be difficult.

“The money Medicaid got 2009 and 2010, that’s not just money sitting in a pot,” he said. “It went into the General Fund and went into Medicaid.”

The report from the Office of the Inspector General of HHS said the agency overstated its enrollment of qualifying children by 92,370 in FY 2009, and 93,231 in FY 2010. According to the OIG, the discrepancy had to do with the different means of calculating how children qualify.

“The State agency overstated its current enrollments because, rather than reporting a monthly average enrollment of qualifying children, it reported to CMS the total number of all qualifying children that had been enrolled in its program for each year reviewed,” the report said.

The different calculation methods, Williamson said, can lead to different enrollment numbers. Taking the entire year will capture every child who ever qualified for Medicaid during the year, however long that took place. An average monthly enrollment would reflect children who may become eligible for a shorter period of time before becoming ineligible.

Williamson said the agency began using “the number that CMS and the OIG want Alabama to use” starting in 2011. The state has about $35 million in as-yet unpaid credits from CMS for 2011 and 2012, and may receive additional credits in 2013, which Williamson said could be used toward the $88 million. He hoped CMS would negotiate with them over the remainder.

“We think there was a misunderstanding back in 2009,” Williamson said. “We think there’s no evidence the state did anything other than act in good faith, and try to provide right numbers in ‘09 and ‘10.”

Alabama and Medicaid have feuded over funding in the past. A long-running battle over Alabama’s methods for determining Medicaid costs that could have cost the state $500 million was settled in November, 2010. Sen. Arthur Orr, R-Decatur, the chair of the Senate Finance and Taxation General Fund committee, said Wednesday that he would see how the negotiations proceeded.

“We’re sure the governor and Dr. Williamson will be talking with CMS and (DHS) Secretary (Kathleen) Sebelius about the reduction and elimination of the chargeback,” he said. “It’s too early to know the amount.”

– posted by Brian Lyman

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