Of the eight acute-care hospitals in our sample, one hospital always reconciled patient accounts and refunded associated Medicaid overpayments to the State agency. However, the seven remaining hospitals in our sample did not always reconcile patient account credit balances and refund to the State agency the associated Medicaid overpayments. One of these seven hospitals reported most of its overpayments, but the State agency had not recovered the
overpayments during our fieldwork. For these seven hospitals, we sampled a total of 148 patient accounts with both Medicaid payments and credit balances and found that 81 contained Medicaid overpayments and 67 did not. The Medicaid overpayments associated with the 81 patient accounts totaled $30,057 ($18,472 Federal share).
On the basis of these sample results, we estimated that the State agency could recover an additional $15,299,033 ($10,538,912 Federal share) from hospitals and obtain future savings if it enhanced its efforts to recover Medicaid overpayments in hospitals’ accounts.
The hospitals did not identify and refund Medicaid overpayments because the State agency did not require them to exercise reasonable diligence in reconciling patient account credit balances to determine whether overpayments had been made. Also, the State agency did not require hospitals to submit reports that showed all identified Medicaid overpayments recorded as credit balances in the hospitals’ accounting systems.