Pennsylvania Medicaid officials improperly sought federal reimbursement of $6 million they claimed they spent administering the healthcare program when in fact they actually used the funds for training nursing home providers, according to the U.S. Department of Health and Human Services Inspector-General (HHS-IG).
Approximately 90 percent of all formula-driven federal aid flowing to the states is for Medicaid, but with healthcare costs steadily rising, it's becoming increasingly tough for state officials to cover their part of the program's funding.
Since federal law allows the states to claim reimbursement from Uncle Sam for Medicaid administrative expenses, there is a built-in incentive to shift as much of the costs as possible to the federal government.
Pennsylvania officials disputed the HHS-IG's finding, insisting that the $6 million in reimbursements they sought between 1996 and 2011 were inherently administrative in nature.
But the HHS-IG rejected that claim, noting that "based on our review, Initiative costs were for training nursing home provider staff and not costs to administer the Medicaid program. CMS explicitly prohibits claiming provider training as administrative costs. Nothing in the State agency's comments caused us to change our recommendations."
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