Wisconsin's Medicaid program potentially received $22.8 million in improper federal payments for residential care center treatment because the state used cost allocation methods that didn't meet federal requirements, according to a report from the HHS Office of Inspector General.
From 2004 to 2006, the state claimed residential care center payments totaling $41.3 million, with federal Medicaid payments accounting for $23.9 million. According to the report, Wisconsin health officials failed to adequately document and justify most of its Medicaid reimbursement claims for residential care center services provided by youth care workers and social workers under HealthCheck, a preventive health check-up program for anyone under 21 eligible for Wisconsin Medicaid or BadgerCare Plus, another state healthcare program.
The state agency's allocation methodology for the program used estimates it couldn’t adequately support, according to the report. Furthermore, the OIG found the state claimed unsupported administrative costs as an add-on to the residential care center service costs. The OIG has recommended that Wisconsin's Medicaid agency refund the federal government for the unallowable costs and work with CMS to develop payment and allocation methodologies for claiming allowable costs under HealthCheck.
The state agency disagreed with the recommendations, saying the OIG had misapplied cost principles from the Office of Management and Budget to question Medicaid costs. Furthermore, the state Medicaid agency claimed the OIG had inaccurately cited a federal payment rate regulation as a requirement for supporting documentation and inappropriately classified residential care center support costs as administrative costs.
Despite the state agency's objections, the OIG maintains that its findings and recommendations are valid, according to the report.
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