Federal audits request Alabama to pay back nearly $100 million for improperly claimed Medicaid funds

2016 has been a rough year for the state of Alabama and things don’t look like they’ll be getting any easier any time soon.

In a speech Thursday, State Auditor Jim Zeigler brought public attention to the results of federal audits of the Alabama Medicaid Agency that his office received Wednesday. According to two July 2016 reports from the Office of Inspector General at the U.S. Department of Health and Human Services (HHS), Alabama overcharged the HHS by nearly $100 million for Medicaid services delivered years ago.

• Report one, titled Alabama Claimed Millions in Unallowable School-Based Medicaid Administrative Costs, concludes the state did not get their school-based administrative costs approved properly. According to the report, some state employees were listed more than once on state’s list of school officials dedicated to Medicaid.
  • It recommends a $75,274,946 refund to the federal government.
• The second report, titled 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 requests for federal money to pay for service at privately run hospitals that didn’t qualify for the payments.
  • It recommends the state refund the $21,302,31 to the federal government.

Combined, the two reports call for a total of $96,577,257 to be refunded to the federal government, which equates to roughly 14 percent of the general fund budget the state Legislature has appropriated to Medicaid services for Fiscal Year 2016.

While the audits do not fall under the authority the State Auditor’s Office, Zeigler points out the state will essentially lose out on the money it’s receiving from the BP oil spill settlement to repay these debts.

“Alabama will lose $75 million of that [settlement]money because it failed a federal audit — and failed badly,” said Zeigler. “What the BP settlement gave, the failed audit will take away.”

Zeigler’s Thursday speech in Fairhope comes less than 24 hours after the Alabama Legislature approved distribution for the oil spill settlement money that sent an additional $120 million to Medicaid for 2016-2017.

“The Bentley administration has reached a new low point in mismanagement,” Zeigler continued. “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.”