The state of Alabama's Medicaid Agency must repay some enrollment bonuses received in the Children's Health Insurance Program (CHIP), according to the U.S. Department of Health and Human Services' Office of the Inspector General.
During the 2009 and 2010 fiscal years, 92 percent of the $95 million Alabama received in CHIP enrollment bonuses was “not allowable in accordance with federal requirements,” the OIG wrote.
“Although most of the data elements used in the bonus payment calculations were in accordance with federal requirements, the state agency overstated its FYs 2009 and 2010 current enrollment in its requests for bonus payments,” the watchdog agency said.
Instead of reporting a monthly average of enrollment for qualifying children, staff at the Alabama Medicaid Agency gave the Centers for Medicare & Medicaid Services the total number of all qualifying children that enrolled in CHIP for each year reviewed, the OIG found.
Alabama Medicaid reported enrollment numbers of 474,473 and 516,469 for FYs 2009 and 2010, when the monthly averages should have been about 382,000 and 423,000, respectively, the OIG calculated.
“As a result, CMS overpaid Alabama $88,197,498 in bonus payments.”
Rather than $95 million for 2009 and 2010, Alabama should have been paid $7.1 million, the OIG calculated.
The OIG is recommending that the $88 million be refunded to the federal government, and that the Alabama Medicaid Agency “ensure that future requests for bonus payments are calculated using the monthly average number of qualifying children and not the total number per year, to comply with federal requirements.”
In a letter responding to the OIG’s draft report, Alabama Medicaid’s acting commissioner Stephanie McGee Azar said the agency “respectfully disagrees with OIG's recommendation,” and “believes that it qualified for the bonuses at issue.”
“Even if one assumes for the sake of argument that certain of the bonuses paid to Alabama Medicaid in fiscal years 2009 and 2010 were unallowable, Alabama Medicaid respectfully disagrees with the revised bonus amounts calculated” by the OIG, Azar continued, noting that the state contracted with Mathematica and Optumas Actuarial Services to analyze state enrollment data and bonus calculations.
“While the state remains dedicated to capturing each and every qualified child in the bonus calculations, the reconstruction and validation of historical enrollment data from disparate information systems has proven a costly and time-intensive endeavor,” Azar wrote.
As far as how much of any of the payments will be refunded, the OIG said, “We will share our supporting information with CMS to assist the state agency and CMS in reaching resolution.”
The bonus payments at issue are from a pool of $3.2 billion allocated in the Children's Health Insurance Program Reauthorization Act to help states offset the cost of increased Children’s Medicaid enrollment.
The five-year program has one more funding round. Last December, CMS awarded $306 million to 23 states for streamlining CHIP application processes and increasing enrollment and retention.