Feds recommend Alabama pay back nearly $100 million in improperly claimed Medicaid money


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MONTGOMERY, Ala. – In a speech Thursday, State Auditor Jim Zeigler called attention to two July 2016 reports from the Office of Inspector General that call for Alabama to repay the federal government nearly $100 million dollars for improperly claiming Medicaid money.

Zeigler’s speech in Fairhope comes one day after the state legislature approved distribution for BP oil spill settlement money that sent an additional $120 million to Medicaid for 2016-2017.

That money is meant to cover a shortfall that would prevent the state from creating Regional Care Organizations that could bring in an additional $700 million  from the feds.

The text of Zeigler’s speech includes, “The Bentley administration has reached a new low point in mismanagement.  They did not bring to the attention of the legislature that the failed audits would grab all of the new BP Medicaid money for 2017 and part for 2018.”

Zeigler continues, “I would have brought this to the attention of the legislature myself, but my office just received the new audits yesterday.  These audits do not fall under the authority of my office, but honest state employees report things to me anyway because they cannot get anything done going through the Bentley administration.”

The first OIG report, called ALABAMA CLAIMED MILLIONS IN UNALLOWABLE SCHOOL-BASED MEDICAID ADMINISTRATIVE COSTS, concludes that the state did not get their school-based administrative costs approved properly. It recommends refund $75,274,946 to the Federal Government. The report notes that the state agency disagreed with the OIG’s findings, but the OIG did not receive any additional documentation that changed their conclusions or recommendations.

The second OIG report, called ALABAMA DID NOT COMPLY WITH FEDERAL AND STATE REQUIREMENTS FOR CLAIMING MEDICAID CERTIFIED PUBLIC EXPENDITURES FOR FEDERAL FISCAL YEAR 2010, concludes Alabama used the wrong inflation factor when calculating certified public expenditures. It recommends the state refund the $21,302,311 that related to the errors the State agency made when calculating CPEs.

Together, the two reports call for a total of $96,577,257 to be refunded to the federal government.

That would make up 14% of general fund money the Alabama legislature appropriated to Medicaid for the fiscal year of 2016.

A spokesperson for the governor’s offices tells WHNT News 19, “The Audit reports that were issued in July are recommendations from OIG to CMS.   At this time, Medicaid is working with CMS to resolve these issues and has not received a demand letter from CMS. “

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