Alabama Owes $88M for Bonus Insurance Overpayments: Feds

BRADENTON, Fla. — Alabama received $88.2 million more in bonuses for its Children's Health Insurance Program than allowed under the program, according to the office of inspector general for the U.S. Department of Health and Human Services.

The program in question allowed qualifying states to receive performance bonus payments from the federal Centers for Medicare & Medicaid Services. CMS was responsible for determining if states met the requirements to receive a bonus from fiscal 2009 through 2013 to offset the cost of increasing the number of children enrolled in Medicaid.

"We reviewed the bonus payments that Alabama received for [fiscal years] 2009 and 2010 because the amounts of the payments were relatively high compared with those of other states receiving bonus payments," the OIG report said.

Alabama received $95 million or 34% of the $281 million in bonus payments made to all states for the two years in question. The Alabama Medicaid Agency, which administers the program for the state, requested the bonus payments in 2009 and 2010.

Some 92% of bonus payments that Alabama received for the years in question were "not allowable in accordance with federal requirements," inspectors said.

"The state agency overstated its current enrollments because, rather than reporting a monthly average enrollment of qualifying children, it reported…the total number of all qualifying children that had been enrolled in its program for each year reviewed," they said.

As a result, the CMS overpaid Alabama $88,197,498 in bonus payments.

Inspectors recommended that the state refund the overpayment and ensure that future bonus requests are calculated using the monthly average number of qualifying children.

In response to the OIG findings, acting Alabama Medicaid Commissioner Stephanie McGee Azar disagreed with the recommendation that the state return $88.2 million, and said the state believed that it qualified for the bonuses in question.

She also said the state has worked closely with CMS "in preparing the state's yearly bonus application in compliance with federal requirements since the state's first submission in 2009."

Azar said the state concurred with the inspector general's second recommendation, and that bonus applications for 2011 and 2012 would be calculated using the monthly average of qualifying children.

For reprint and licensing requests for this article, click here.
Healthcare industry Alabama
MORE FROM BOND BUYER