South Carolina owes feds $1.6 million for Medicaid mistake

South Carolina owes the federal government $1.6 million for an accounting error related to patients with intellectual disabilities who receive services through a special Medicaid program.

South Carolina has agreed to pay back the federal government $1.6 million related to room-and-board costs for patients with intellectual disabilities, a new federal report shows.

More than 6,000 South Carolinians with intellectual disabilities receive services through a special Medicaid program called the Intellectual and Related Disabilities Waiver.

Some of those services include vision care, dental care, incontinence supplies, nursing care, career preparation and prescription drugs. But the waiver, mainly paid for with federal funds, doesn’t cover housing.

Nevertheless, the South Carolina Department of Disabilities and Special Needs broke the rules for several years by charging Medicaid for these patients’ room and board.

Lois Park Mole, director of government and community relations for the Department of Disabilities and Special Needs, called this mistake an accounting error. She said the federal government has made it clear that the agency needs to charge patients with intellectual disabilities for their own room and board, not bill Medicaid.

“The thing that’s extremely important for people to understand ... is that this was a case where the federal government was wanting the consumer to pay more costs and the federal government to pay less costs,” Park Mole said. “In other words, the feds were saying the consumers were being under-charged for the cost of their services.”

The federal report shows, during the 2010 fiscal year, the state claimed $1.6 million in federal Medicaid reimbursement under the Intellectual and Related Disabilities waiver program for “unallowable room-and-board costs.”

A previous federal audit had already determined that the state claimed $6.7 million in these unallowable costs between the 2007 and 2009 fiscal years.

“In order to ensure that everything is done properly moving forward, (the Department of Disabilities and Special Needs) changed policies to reflect the new interpretation of the requirement and has also conducted training for its provider network,” Park Mole said.

In a letter to the federal government attached to the report, South Carolina Medicaid Director Christian Soura agreed with the auditors’ conclusions. The federal government provided the South Carolina Medicaid agency with a draft copy of the report prior to its official release Tuesday.

Soura’s department also believes this mistake was an accounting error.

“This audit is a follow up to a prior report that highlighted some errors resulting in overpayments several years ago. We’re taking the appropriate steps to correct the findings,” said Christian L. Soura, director of the South Carolina Department of Health and Human Services. “There is often a significant lag in time between the audit period and the release of any findings. For instance, this report studied the 2009-2010 fiscal year, and we’re only now receiving the results.”

Reach Lauren Sausser at 937-5598.