Illinois overdrew federal Medicaid dollars, funds were used for purposes other than Medicaid

Aug 18, 2014 1:22 PM CDT

 

money-roll-generic

CHICAGO (AP) - Federal auditors have found that Illinois used faulty methods for withdrawing federal Medicaid money, resulting in overdraws the state later had trouble repaying.

The U.S. Department of Health and Human Services' Office of Inspector General released the report Monday.

The report says Illinois created "a perpetual 'treadmill effect'" as it continued to overdraw and repay later.

The state's withdrawals exceeded its spending by an average of $60 million per quarter during the three years reviewed by the auditors. The report says the federal government may have lost as much as $792,000 in interest because the state repaid the money two to six months later.

Illinois Department of Healthcare and Family Services Director Julie Hamos said in a response to the audit that her department is addressing the problem.

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Office of Inspector General, U.S. Department of Health and Human Services 

• Office of Audit Services
• Center For Medicare and Medicaid Services
• Report

Audit (A-06-13-00032)

08-07-2014
Illinois' Federal Medicaid Withdrawals Were Supported by Net Expenditures for Fiscal Years 2010 Through 2012

Complete Report

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Summary

The Federal Medicaid funds totaling $23.3 billion that the Illinois Department of Healthcare and Family Services (State agency) obtained for FYs 2010 through 2012 were supported by net expenditures. However, the State agency overdrew Medicaid funds from its main Medicaid Payment Management System (PMS) accounts for most quarters because its withdrawal methodology was imprecise. The State agency could not immediately repay the overdrawn amounts because the funds were used for purposes other than Medicaid. Additionally, the State agency did not always withdraw Federal funds from the appropriate PMS accounts because of a faulty procedure and other misclassifications. The withdrawals caused the balances in the accounts to be wrong, so the State agency had to transfer large amounts of Federal funds to correct those balances.