California Improperly Claimed Enhanced Federal Reimbursement for Medicaid Family Planning Services Provided in Central Los Angeles County

The California Department of Health Care Services (State agency) did not always comply with certain Federal requirements when claiming Federal reimbursement at the 90-percent rate for family planning services provided under the Family Planning, Access, Care, and Treatment (FPACT) program in central Los Angeles County. On the basis of our sample results, we estimated that the State agency claimed approximately $3 million unallowable Federal reimbursement.

The overpayment occurred because the State agency's Medicaid Management Information System (MMIS) lacked edits to prevent family-planning-related services from being claimed at the 90-percent rate. Also, the State agency did not have billing procedures to ensure that it claimed reimbursement at the 90-percent rate only for services clearly provided for family planning purposes.

We recommended that the State agency (1) refund approximately $3 million to the Federal Government, (2) establish MMIS edits to ensure that FPACT claims meet Federal and State requirements for reimbursement at the 90-percent rate and at the regular FMAP for family-planning-related services, and (3) establish billing procedures to ensure that only services clearly provided for family planning purposes are claimed for reimbursement at the 90-percent rate. The State agency partly agreed and partly disagreed with our findings.