North Carolina Did Not Report and Return All Medicaid Overpayments for the State's Medicaid Fraud Control Unit Cases
Learn how the AI-generated research projects were createdOverall Conclusion
The State agency did not report and return the Federal share of all MFCU-determined Medicaid overpayments identified for the period under review (October 1, 2019 through September 30, 2021).
Source Document
Audit Scope
Audit scope: North Carolina's Medicaid program as administered by the North Carolina Department of Health and Human Services, focusing on the Medicaid Fraud Control Unit (MFCU) actions related to recoveries of Medicaid overpayments through judgments and settlements under Medicaid fraud statutes. The period covered is October 1, 2019 through September 30, 2021 (FY 2020 and 2021). The audit examined 12 MFCU-determined Medicaid overpayments totaling $41,383,314 ($27,495,987 Federal share) and assessed whether these overpayments were properly reported to CMS on Form CMS-64 and whether the Federal share was returned timely. The audit did not assess the State agency's overall internal control structure beyond reporting of MFCU-determined overpayments.
Key Findings Summary
One case was correctly reported and returned ($27,033, $17,834 Federal share) on the Form CMS-64.
The State agency did not report and return the Federal share of all MFCU-determined Medicaid overpayments identified for FYs 2020 and 2021. Specifically, the State should have reported MFCU-determined Medicaid overpayments totaling $41,383,314 ($27,495,987 Federal share) for 12 cases during the period under review.
The State agency did not report and return $30,352,630 ($20,134,402 Federal share) for seven cases on the Form CMS-64.
View the Findings tab to see all 5 findings
AI-Assisted
AI Scope Summary
To determine whether North Carolina reported and returned the correct Federal share of MFCU-determined Medicaid overpayments identified during October 1, 2019 through September 30, 2021.
AI-Generated Insight
This audit underscores critical gaps in communications and control processes between state Medicaid agencies and Medicaid Fraud Control Units. The failure to report and refund the correct Federal share of MFCU-determined overpayments risks improper use of Federal funds and violates CMS reporting requirements. Strengthening policies, ensuring timely transfer of case information, and formalizing procedures for all MFCU-determined overpayments—regardless of whether restitution is collected—will improve program integrity and compliance with federal regulations.
Audit Objectives
Determine whether the State agency reported and returned the correct Federal share of MFCU-determined Medicaid overpayments identified during the period October 1, 2019 through September 30, 2021.
Audit Findings (5)
One case was correctly reported and returned ($27,033, $17,834 Federal share) on the Form CMS-64.
The State agency did not report and return the Federal share of all MFCU-determined Medicaid overpayments identified for FYs 2020 and 2021. Specifically, the State should have reported MFCU-determined Medicaid overpayments totaling $41,383,314 ($27,495,987 Federal share) for 12 cases during the period under review.
The State agency did not report and return $30,352,630 ($20,134,402 Federal share) for seven cases on the Form CMS-64.
The State agency did not report and return $11,003,651 ($7,343,751 Federal share) for five cases within the required timeframe, with late reporting of 4 to 6 quarters for several cases and one case counted as both late and unreported.
The outcome occurred because the State agency relied on the MFCU to provide case files and overpayment information and did not have procedures to ensure all MFCU-determined Medicaid overpayment case files were sent to the State, and the MFCU was unaware that reporting was required even if no payment occurred.
Recommendations (3)
Report and return the Federal share for the seven unreported cases totaling $30,352,630 ($20,134,402 Federal share).
Strengthen internal controls by expanding written policies and procedures to include procedures for requesting, recording, and reporting all MFCU-determined Medicaid overpayments within prescribed regulatory timeframes, and ensuring they received all case files.
Work with the MFCU to determine the Medicaid overpayments for cases after the audit period and ensure that all overpayments are reported on the Form CMS-64.