Medicaid Overpayments Made to Hawaii Should Be Disallowed

HRD-85-47: Published: Mar 20, 1985. Publicly Released: Mar 20, 1985.

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GAO reviewed Hawaii Medicaid operations to determine if federal Medicaid funds were properly used as a secondary resource to pay for medical costs that resulted from motor vehicle accidents.

GAO found that: (1) Hawaii did not always follow federal statutory requirements to use other insurance available to Medicaid recipients before Medicaid; (2) under its no-fault motor vehicle insurance law, Hawaii allowed insurers to exclude medical coverage for Medicaid recipients, who in certain circumstances, were injured while driving their vehicles; and (3) when the coverage for Medicaid recipients was not excluded, Hawaii was not actively pursuing collections from the no-fault insurers. GAO estimated that, during fiscal years 1982 to 1984, Hawaii paid about $1.4 million in federal funds for health services that it would not have paid if it had followed Medicaid's third-party liability provisions.

Recommendation for Executive Action

  1. Status: Closed - Implemented

    Comments: HCFA notified Hawaii that its no-fault insurance statute does not comply with the law and requested a corrective action plan. In December 1986, HCFA conducted an audit to determine the amount of federal funds to disallow. HCFA disallowed the excess payments identified through its audit and required the state to review all claims not in the HCFA sample.

    Recommendation: The Administrator of the Health Care Financing Administration (HCFA) should recoup the federal portion of Medicaid payments for which Hawaii did not treat Medicaid as secondary payer and disallow future Medicaid claims of this nature.

    Agency Affected: Department of Health and Human Services: Health Care Financing Administration


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