Department of Mental Health and Mental Retardation
An Audit Report on Medicaid Services at
the Department of Mental Health and
Mental Retardation
December 1999
Report Number 00-004
Overall Conclusion
The Department of Mental Health and Mental Retardation (Department) does not routinely analyze the cost of providing Medicaid services through Intermediate Care Facilities for the Mentally Retarded (ICF/MR) and Home and Community Services (HCS). In fiscal year 1999, the Department spent approximately $928 million on ICF/MR and HCS services. Without routine analysis, the Department cannot evaluate the reasonableness of expenses or look for potential fraud, waste, and abuse.
Key Facts and Findings
The Department should routinely analyze HCS cost reports to evaluate the reasonableness of costs and to look for potential fraud, waste, and abuse. Additionally, the Department should conduct desk audits of all HCS cost reports and a sufficient number of on-site financial audits in accordance with generally accepted auditing standards.
The Department should review each ICF/MR provider's cost
data to ensure that the financial and statistical information submitted conforms to all
applicable rules and instructions. The Department should conduct a sufficient number of
on-site financial audits in accordance with generally accepted auditing standards.
With a shift of services from ICF/MR to HCS settings, the Department must move from the role of provider to regulator. Many controls are in place to administer provider contracts and to regulate providers. However, the Department can improve central office Medicaid operations and administration, particularly its business processes, policies and procedures, and information systems.
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