Review of Mississippi's Medicaid Upper-Payment-Limit Calculations for Hospitals and Nursing Facilities

Our objectives were to determine whether Mississippi calculated (1) the upper payment limits (UPLs) for non-State government nursing facilities in accordance with Federal regulations and the approved State plan amendment and (2) the inpatient and outpatient UPLs for private, State, and non-State government hospitals in accordance with Federal regulations and the approved State plan amendments.  Mississippi calculated the State fiscal years (FY) 2002 and 2003 UPLs for non-State government nursing facilities in accordance with Federal regulations and the approved State plan amendment.  However, for those years, the State did not comply when calculating the inpatient and outpatient UPLs for private, State, and non-State government hospitals.  As a result, from October 2000 through December 2002, Mississippi potentially overstated hospital inpatient UPL payments by about $183 million and hospital outpatient UPL payments by about $41 million. We recommended that Mississippi (1) continue to work with CMS to resolve the potential UPL overpayments of approximately $224 million ($171 million Federal share) for hospital inpatient and outpatient services, (2) implement procedures to ensure that future UPL calculations comply with Federal regulations, and (3) identify and refund any overpayments made subsequent to our audit period. In commenting on our draft report, the State said that it had requested that CMS waive any requirement for the repayment of potential UPL overpayments, based on the Katrina disaster. The State added that it had implemented procedures to ensure that future UPL calculations comply with Federal regulations and that it was not aware of any overpayments made subsequent to our audit period. The State's comments did not warrant any revisions to the results of our review or to our recommendations.