States Should Intensify Efforts To Promptly Identify and Recover Medicaid Overpayments and Return the Federal Share

GAO reviewed five State systems for recovering Medicaid overpayments to providers and for returning the Federal share of these overpayments to the Department of Health and Human Services (HHS).

GAO found that at least $222.6 million in substantiated or potential overpayments had been identified but not collected, even though much of this amount has been outstanding for several years. The five States had recovered about $18.7 million in Medicaid funds for which they either had not returned or did not promptly return the Federal share. Moreover, many funds recovered by the States are deposited in interest-bearing accounts, but the States have not consistently shared this interest with the Federal Government. GAO believes that these conditions resulted because the Health Care Financing Administration (HCFA) had not established consistent policies and guidelines for States to use in administering overpayment recovery activities. Also, HCFA did not have a clear policy explaining when and under what circumstances Federal financial participation in outstanding overpayments would be denied. State systems for recovering overpayments and for returning the Federal share of such funds were fragmented, cumbersome, uncoordinated, and slow.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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