Finding 1157907 (2024-003)

Criteria – The Tribe participates in the Medicaid Administrative Claiming (MAC) Random Moment Time Study (RMTS) administered by the Washington State Health Care Authority (HCA) and authorized by the Centers for Medicare and Medicaid Services. According to Title 45 U.S. Code of Federal Regulations Part 75.430(i)(5), a RMTS is a type of “substitute system” used for determining and documenting time spent on, and therefore the costs of, Medicaid administrative and direct service activities. The grant terms and conditions specify that eligible participants in the RMTS must be, among other things, employees whose positions are reasonably expected to perform MAC activities and are not included in an approved Indirect Rate. To support compliance, HCA publishes a MAC RMTS Coordinator Manual, which outlines required quarterly activities, which includes activating and deactivating participants as necessary. Condition and context – As part of the MAC RMTS, enrolled participants respond to random moment polls during their standard workday. The study administrator processes the poll results to quantify time spent on MAC activities and calculate the allowable quarterly claim amount. During the audit period the Tribe negotiated two indirect cost rates with the U.S. Department of the Interior, Interior Business Center: one for Indian Health Services Public Law 93-638 (IHS P.L. 638) programs, and another for all other programs. Several employees included in the indirect cost pool for the IHS P.L. 638 rate regularly perform MAC activities and have historically participated in the MAC RMTS. However, the inclusion of these employees in the new IHS P.L. 638 indirect cost pool, preclude them from continued participation in the MAC RMTS. The participation of these employees in the MAC RMTS resulted in overpayments totaling approximately $50,000 during the audit period. Cause – This was the Tribe’s first year operating with two separate federal approved indirect cost rates pools. The Tribe did not assess the impact of the newly negotiated IHS P.L. 638 indirect cost rate on RMTS participant eligibility. Consequently, employees included in the IHS P.L. 638 indirect cost rate pool were not deactivated from the MAC RMTS as required. Questioned costs – None. The Tribe has worked with HCA to adjust the quarterly claims amounts accordingly. All past overpayments will be reimbursed to HCA subsequent to audit issuance. Additionally, the Tribe has recorded an adjustment to reduce the expenditures reported in the financial statements and recognized a corresponding liability for the overpaid funds. Effect – Inclusion of ineligible participants creates uncertainty regarding the accuracy of RMTS claims and resulted in unallowable costs charged to the MAC RMTS program. Repeat finding – This is not a repeat finding. Recommendation – The Tribe should strengthen internal controls over the MAC RMTS participant review process. Specifically, it should implement a quarterly review to ensure that all employees enrolled in the RMTS are eligible and not included in any approved indirect cost rate pools that would disqualify them from participation. Views of Responsible Officials – This is the first year of dual indirect cost rates. Management agrees with this finding and will implement a corrective action plan.