Finding 575415 (2024-002)

Finding: The Uniform Guidance, 2 CFR Part 200, Appendix XI Compliance Supplement, dated May 2024, stipulates for a cost to be allowable under federal awards certain general criteria must be met, including costs that are adequately documented and necessary and reasonable for the performance of the federal award. The Alabama Medicaid Agency (“AMA”) operates a Non-Emergency Transportation (“NET”) program for individuals who are eligible for Medicaid benefits. This program helps eligible recipients pay for rides to dental and doctor offices, hospitals and other medical facilities when the service is also covered by Medicaid and the costs are paid with federal Medicaid program monies. Eligible recipients can request and receive reimbursements for the costs of utilizing the NET program. Subsequent to the payments of certain NET claims, AMA received information alleging that falsified information related to certain NET expenditures was being submitted and approved on behalf of a specific recipient. Upon receipt of these allegations, AMA initiated a review of the supporting documentation which had been submitted and approved. The review consisted of a detailed examination of all NET claims associated with the recipient. The results of the examination revealed that an AMA employee was entering and approving falsified information on behalf of a recipient. We reviewed, recalculated and verified information provided to us by AMA and did not note any differences. For the fiscal year ended September 30, 2024, there were 347 NET reimbursement requests totaling $30,501.75 submitted in the name of the specific recipient and of those, all 347 reimbursement requests were based on falsified non-existent documentation. The Alabama Medicaid Agency reimbursed the recipient based on falsified reimbursement requests and, therefore, improperly expended Medicaid Cluster federal award program funds. Recommendation: The Alabama Medicaid Agency should take actions to ensure that all reimbursements of expenses are adequately documented, based on true and accurate supporting documentation, and to ensure costs are allowable under the federal award. Response/Views: The Alabama Medicaid Agency agrees with the above recommendation. Medicaid immediately took action when it discovered an employee was defrauding the program by approving falsified claims. The immediate actions included terminating the employee, referring the employee for criminal prosecution, and making corrective actions. Corrective Action Planned: Corrective actions began immediately when the falsified claims were discovered by the Alabama Medicaid Agency. Employee access to the Non-Emergency Transportation (NET) reimbursement system has been reviewed and updated. Payment override access has been limited to two persons. Also, each NET program employee has been required to update their list of family or acquaintances to ensure each employee does not have a conflict of interest when reviewing reimbursement requests. The conflict-of-interest updates have been entered into the system. Finally, all NET employees have been required to attend training on program operation and policies. Anticipated Completion Date: The above-mentioned Corrective Action was completed in February 2025. Contact Person(s): Stephanie Lindsay, Chief Assistant to the Commissioner, at stephanie.lindsay@medicaid.alabama.gov or (334) 353-3781.