The Department of Health and Human Services (HHS), Office of the Inspector General, in a report dated March 2013, has recommended that the State of Florida repay approximately $2.3M in federal funds that represent the federal share of Medicaid overpayment collected for the audit period of July 1, 2007 through June 30, 2010, and a subsequent period of July 1, 2010 through June 30, 2012. At issue was an apparent lack of coordination between the State’s Agency for Health Care Administration (AHCA), which operates Florida’s Medicaid program, and the Department of Children and Families (DCF) which conducts Medicaid eligibility determinations under the State’s Medicaid Plan. DCF is also charged with ensuring that Medicaid beneficiary eligibility information is accurate and up to date, and that benefits are properly authorized.

A reportable Medicaid overpayment comes about when funds are expended on behalf of beneficiaries who were not eligible for Medicaid coverage (i.e. incarcerated beneficiaries) or those who are eligible only after meeting a share of costs (i.e. the medically needy). DCF is responsible for recovering such overpayments and coordinating its recovery efforts with AHCA.

For the audit period noted above, approximately $2,499,370 ($1,400,888 federal share) in Medicaid overpayments, and for the subsequent period, an additional $1,532,633 ($851,842 federal share) for a combined total of $4,032,003 ($2,252,730 federal share) were recovered by the State. Neither of these periods’ recoveries were properly reported to HHS. The State’s failure to do so has resulted in HHS requesting that the State repay the federal share collected. The actual repayment will be completed through offset against future Medicaid payments to the State.

The repayment could have been significantly higher if the federal authorities had chosen to recover the full amount of the federal share of overpayments identified, rather than just the amounts collected. Under this analysis, the State would have been held accountable for $12,251,265 in federal share identified for the audit period, and $10,850,377 in federal share for the subsequent period, as well as the $1,400,888 and $851,842 federal share that was actually collected.

As a result of this matter, one can expect that greater oversight will be given to overpayment reporting in the near future, and that additional efforts in coordination and communication between DCF and AHCA will occur.