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From July 1, 2012, through June 30, 2013, the Virginia Department of Medical Assistance Services (State agency) paid $78.2 million to 73 eligible hospitals in Virginia for Medicaid EHR incentive payments. We reviewed hospitals that received an incentive payment totaling $1 million or more. There were 15 hospitals that each received total incentive payments exceeding $1 million; however, because the State agency contracted with a public accounting firm to perform desk reviews of hospitals' cost reports, we limited our audit to 5 hospitals that were not reviewed by the accounting firm at the time of our audit. The State agency made incorrect EHR incentive payments to two hospitals totaling $38,000. We recommended that the State agency refund the $38,000 in net overpayments made to the two hospitals and adjust the two hospitals' remaining incentive payments to account for the incorrect calculations (which will result in future cost savings of $38,000); and (3) review the calculations for the hospitals not included in the five we reviewed to determine whether payment adjustments are needed, and refund any overpayments identified. In written comments on our draft report, the State agency noted that its public accounting firm conducted post payment audits at the two hospitals and identified additional overpayments that it addressed after we completed our fieldwork.

In eight previous audits, we identified instances in which State Medicaid agencies (State agencies) did not always comply with Federal requirements in administering their Home and Community-Based Services (HCBS) waiver programs. Specifically, we found that State agencies did not always exclude unallowable room-and-board costs when determining payment rates under the HCBS waiver program, resulting in unallowable Medicaid reimbursement. Our previous audits also conveyed certain other findings that resulted in unallowable and unsupported Medicaid reimbursement. The State agencies did not have adequate controls to ensure that their HCBS waiver programs complied with applicable Federal requirements regarding the need to exclude unallowable room-and-board costs when determining payment rates and to ensure that certain other costs complied with the requirements associated with their HCBS waiver programs. As a result of the inadequate controls regarding unallowable room-and-board costs and certain other unallowable and unsupported costs, the State agencies claimed at least $176.5 million (Federal share) in unallowable and unsupported Federal Medicaid reimbursement for services under their HCBS waiver programs.

This is a publication by GAO's Inspector General that concerns internal GAO operations. This report was submitted to the Comptroller General in accordance with Section 5 of the Government Accountability Office Act of 2008. The report summarizes the activities of the Office of Inspector General (OIG) for the second reporting period of fiscal year 2016.

Most Medicare payments for chiropractic services did not comply with Medicare requirements. On the basis of our sample results, we estimated that $358.8 million, or approximately 82 percent, of the $438.1 million paid by Medicare for chiropractic services was unallowable. These overpayments occurred because CMS's controls were not effective in preventing payments for medically unnecessary chiropractic services.