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Audit (A-07-08-02719)

05-19-2009
Review of the Long-Term Care, Managed Care Program Costs Claimed by the Utah Department of Health

Executive Summary

The State did not ensure that payments made under nonrisk contracts for long-term care (LTC) services were equal to or less than the upper payment limits. The State lacked policies and procedures to ensure that LTC payments made to contractors were equal to or less than the upper payment limits. Under a nonrisk contract, the contractor (1) is not at financial risk for changes in utilization or for service costs incurred that are equal to or less than upper payment limits specified in Federal regulations and (2) may be reimbursed by the State for the incurred costs, subject to specified limits.

Because the State could not ensure that the costs claimed for LTC services were equal to or less than the upper payment limits, we are unable to express an opinion on the $27.4 million of Federal reimbursement that the State received for the costs of LTC services for the period July 1, 2000, through December 31, 2005. Therefore, we are setting aside these costs for adjudication by the Centers for Medicare & Medicaid Services (CMS).

We recommended that the State work with CMS to (1) resolve the allowability of $27.4 million in Federal reimbursement for LTC services that we set aside and (2) review claims subsequent to our audit period through the end of the program in 2007 and return to CMS any overpayments identified subject to the upper payment limits. In written comments on our draft report, the State did not concur with our findings or recommendations. After reviewing the State's comments, we slightly modified our second recommendation. However, the State did not provide information that caused us to change our findings or remaining recommendation.

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