Federal Audit Findings
The audit, conducted by the Office of the Inspector General at the U.S. Department of Health and Human Services, covered the period from October 2018 to June 2019.
Source: Freepik
It found that California had improperly claimed $52.7 million in Medicaid reimbursements.
Details of the Audit
The federal auditors found that out of nearly $373 million claimed for Medicaid reimbursement, $52.7 million was improperly claimed.
Source: 123RF
The audit highlighted the miscalculation method used by California, which had not been updated for years.
California's Response to the Findings
State officials stated that the refund had already been accounted for in the current budget plan.
Source: kaleb tapp/Unsplash
H.D. Palmer, deputy director of external affairs for the California Department of Finance, assured that this refund would not trigger additional spending cuts.
Medi-Cal's Payment System
Medi-Cal pays managed care plans a fixed amount each month for each enrollee.
Source: Online Marketing/Unsplash
The state used a formula to estimate the portion of these payments that went to non-emergency services for immigrants not covered by federal funding.
Federal Approval and Methodology Issues
California claimed that the federal government had approved its calculation method in the early 2000s.
Source: Kelly Sikkema/Unsplash
However, no records were found to support this approval, leading to the improper claims identified in the audit.
Recommendations from the Audit
The Office of the Inspector General advised California to refund money due to potential over-claims and collaborate with federal regulators to reassess and determine improper federal funding claims from other years.
Source: Freepik
This thorough reevaluation is necessary to ensure compliance with federal guidelines and to fix any financial errors that may have occurred.
State's Plan for Repayment
The California Department of Health Care Services plans to repay the federal government in full by June 30.
Source: Engin Akyurt/Unsplash
The department acknowledged the audit’s findings and is cooperating to resolve the issues.
Developing a Refined Methodology
California is collaborating with the Centers for Medicare & Medicaid Services to develop a more accurate methodology for future claims.
Source: Freepik
This effort aims to update payment and claiming processes to prevent similar issues.
Impact on California's Budget
As mentioned, despite the need to repay $52.7 million, the refund is not expected to cause additional budget cuts.
Source: CAgovernor/X
The state had anticipated this repayment in its budget plan, which includes various spending reductions to address a $44.9-billion deficit.
Future Implications for Medi-Cal
California’s efforts to refine its Medicaid claiming process could lead to more accurate funding allocations in the future.
Source: Freepik
This will ensure that Medi-Cal can continue to provide essential services without risking federal funding issues.