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Highlights

GAO reviewed the state systems for recovering Medicaid overpayments to providers and for returning the federal share of these overpayments to the Department of Health and Human Services (HHS).

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Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Health and Human Services 1. The Secretary of Health and Human Services should direct the Administrator of the Health Care Financing Administration (HCFA) to establish procedures for uniform crediting of the federal share of uncashed Medicaid checks and ensure that such credits are timely and accurate.
Closed - Implemented
In August 1982, HCFA issued instructions for establishing uniform procedures for handling uncashed Medicaid checks.
Department of Health and Human Services 2. The Secretary of Health and Human Services should direct the Administrator, HCFA, to modify the procedures through which the federal share of recovered Medicaid overpayments is returned to eliminate the long elapsed time between recovery and return of the federal share.
Closed - Implemented
Section 9512 of the Consolidated Omnibus Budget Reconciliation Act of 1985 requires that overpayments be recouped in 60 days, regardless of when the state collected the overpayment. HCFA is rewriting the proposed regulations to conform to the requirements in the Consolidated Omnibus Budget Reconciliation Act of 1985.
Department of Health and Human Services 3. The Secretary of Health and Human Services should direct the Administrator, HCFA, to review Medicaid cash management practices in all states, except the 10 largest where actions are currently underway, and take appropriate actions to minimize the amount of federal money being held by the states.
Closed - Implemented
All states, except those with state statutory or constitutional constraints, have taken action to minimize the amount of federal Medicaid money being held by them.
Department of Health and Human Services 4. The Secretary of Health and Human Services should direct the Administrator, HCFA, to require states or their fiscal agents to have written agreements with the banks used for Medicaid checks, which ensure that Medicaid checking services are obtained at reasonable costs considering both bank charges and the ability of banks to invest deposit balances.
Closed - Implemented
In August 1982, HCFA issued instructions covering state requirements for the agreements between Medicaid fiscal agents and the banks it uses for Medicaid checking services.

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