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OIG Releases Report: “Review of Michigan’s Reporting Fund Recoveries for State Medicaid Programs on the Form CMS-64 for the First Quarter”

In an audit of Michigan’s Medicaid program, the Office of Inspector General (OIG) found that Michigan’s Medicaid agency did not report on the CMS-64 $3 million in over payments–a direct violation of Section 1903(d)(2) of the Social Security Act (Act). Of that $3 million not reported, $2,198,100 was the federal government’s share. The audit revealed that Michigan’s Medicaid did not report the overpayments because it did not have a system in place to ensure that the overpayments were reported on the CMS-64.

Pursuant to 42 CFR § 433.312(a)(2), the State agency “… must refund the Federal share of overpayments at the end of the 60-day period following discovery … whether or not the State has recovered the overpayment from the provider.” The regulation provides an exception only when the State is unable to recover the overpayment amount because the provider is bankrupt or out of business (42 CFR § 433.318).

To ensure proper reporting in the future, the OIG recommends Michigan Medicaid take the following actions:
• Include the unreported $3 million payments on the CMS-64 and refund the $2,198,100 to the federal government, and • Develop and implement internal controls to properly report and refund the federal share of identified Medicaid overpayments on the CMS-64 form.

Michigan’s Medicaid agreed with these recommendations and has already reported the $3 million on the CMS-64.

For more information, please contact Robert S. Iwrey, Esq. at (248) 996-8510 or (212) 734-0128 or visit the HLP website.

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