Tennessee Medicaid Claimed Hundreds of Millions of Federal Funds for Certified Public Expenditures That Were Not in Compliance With Federal Requirements

Submitting OIG:

Department of Health & Human Services OIG

Report Description:

Why OIG Did This Audit Under a Medicaid waiver, Tennessee was allowed to claim as certified public expenditures (CPEs) the uncompensated cost of care (UCC) at public hospitals for Medicaid enrollees and uninsured patients. During State fiscal years (SFYs) 2009 through 2014, Tennessee claimed a total of $2 billion in CPEs.For SFYs 2010 through 2013, Tennessee claimed the same amount of $373.8 million each year, indicating that it may not have calculated specific estimates of the CPEs for each of those years, as required. Additionally, a recent audit found that a State had improperly paid $686 million in Medicaid supplemental pool payments. Our objective was to determine whether Tennessee complied with Federal requirements for claiming CPEs for public hospital unreimbursed costs. How OIG Did This AuditOur audit covered the $2 billion in CPEs that Tennessee claimed for SFYs 2009 through 2014 (audit period), which were the most recent SFYs for which supporting calculations of actual CPEs were available. We compared the CPEs that Tennessee claimed to its summaries of actual CPEs for each SFY and reviewed the UCC calculations and supporting documentation for five hospitals that received disproportionate share hospital (DSH) payments and five institutions for mental diseases (IMDs).

Date Issued:

Tuesday, October 19, 2021

Agency Reviewed / Investigated:

Department of Health & Human Services

Submitting OIG-Specific Report Number:

A-04-19-04070

Component, if applicable:

Centers for Medicare & Medicaid Services

Location(s):

TN,

United States

Type of Report:

Audit

Questioned Costs:

$397,341,616

Funds for Better Use:

Number of Recommendations:

Recommendation Number	Recommendation Status	Significant Recommendation
271183	Open	No
We recommend that the Tennessee State Medicaid Agency refund to the Federal Government $397,341,616 in overpayments representing the Federal share of CPEs that the State agency claimed in excess of the allowable amount.
271184	Open	No
We recommend that the Tennessee State Medicaid Agency provide support for or refund to the Federal Government $370,119,499 for the net costs of caring for uninsured IMD patients for which the State agency did not provide detailed supporting documentation.
271185	Open	No
We recommend that the Tennessee State Medicaid Agency establish additional policies and procedures to ensure compliance with the STCs including policies and procedures for adjusting the CPE estimates to actual costs on the CMS-64s upon determining that hospitals have been overpaid or underpaid.
271186	Open	No
We recommend that the Tennessee State Medicaid Agency establish additional policies and procedures to ensure compliance with the STCs including policies and procedures for collecting and maintaining patient-level detail data for the uninsured population for the IMDs.
271187	Open	No
We recommend that the Tennessee State Medicaid Agency establish additional policies and procedures to ensure compliance with the STCs including policies and procedures for ensuring that the State agency identifies and excludes from its actual CPE calculations the net costs of caring for IMD patients between the ages of 21 and 64.
271188	Open	No
We recommend that the Tennessee State Medicaid Agency establish additional policies and procedures to ensure compliance with the STCs including policies and procedures for reviewing the actual CPE calculations of its contractor.

Recommendation Number

Recommendation Status

Significant Recommendation

Additional Details

271183

Open

We recommend that the Tennessee State Medicaid Agency refund to the Federal Government $397,341,616 in overpayments representing the Federal share of CPEs that the State agency claimed in excess of the allowable amount.

271184

Open

We recommend that the Tennessee State Medicaid Agency provide support for or refund to the Federal Government $370,119,499 for the net costs of caring for uninsured IMD patients for which the State agency did not provide detailed supporting documentation.

271185

Open