The state is going to put an extra $70 million it will receive as part of a settlement agreement with the federal government over messed up Medicaid payments into the Morehouse and Mercer University schools of medicine.
Gov. Nathan Deal, a Mercer grad, announced the deal Wednesday.
“It is only fitting that we in turn invest this money in health care education programs, particularly those that prioritize placing primary care physician graduates in high-demand areas throughout the state,” Deal said.
“Likewise, this funding fulfills a decades-old commitment made to Mercer University by the state. With this investment in its health care program, we are making good on that promise,” the governor said. “Finally, we look forward to continue working with these two medical schools to advance their health care training and delivery efforts.”
The Atlanta Journal-Constitution reported last year that, through a series of mistakes, Georgia overpaid the federal government for Medicaid services by $90 million and didn't discover the erroneous payments for years. By then, it was well past the time states have to file claims for mistaken payments.
Despite the state’s blunders, a U.S. district judge ruled last year that the federal government had to return the money. The state’s incompetence aside, the judge wrote that hundreds of thousands of Georgians could otherwise be harmed.
Medicaid is the state’s health care program for the poor and disabled. It covers about 2 million Georgians. The federal government provides a big chunk of the funding for the program.
The state’s Department of Community Health went to court to recover the payments after the federal Centers for Medicare and Medicaid Services refused the state’s pleas.
But the department’s complaint acknowledged glaring problems with its own computer system, accounting and budgeting.
Troubles started in early 2003, when the department launched a new computer system for processing claims of Medicaid providers. That system proved to be severely flawed, causing significant delays in paying doctors, hospitals, clinics and other medical providers. A crisis ensued when they threatened to stop treating Medicaid patients unless they were paid.
The department’s solution was to give medical providers advance payments until its claims process system could be fixed. It was understood that those advance payments would later be reconciled with actual claims and the federal government would pay its share of those Medicaid expenses.
But the way that Georgia handled and reported the claims apparently led the DCH to mistakenly credit $45 million too much to the federal agency in 2005 and another $45 million in 2006.
It wasn’t until 2008, after an external auditor flagged other concerns, that the DCH did its own in-depth review and discovered the mistakes. In 2009, it demanded that the federal agency reverse the credits and return the $90 million. Too late, the federal government said. Under rules established by the Centers for Medicare and Medicaid Services, states have only two years to file claims for mistaken payments.
The state has long provided millions of dollars of public funding annually to the two private medical schools. Deal had already recommended $48 million in next year’s budget for the two schools.
Valerie Montgomery Rice, the president and dean of the Morehouse School of Medicine, said the money would allow the school to “continue to increase the enrollment of our medical school and residency programs, as well as ensure increased access to innovative and critical health services for the residents of our state.”
Mercer officials said they would use the money to, among other things, explore new ways to better serve rural Georgia.
“Mercer University is committed to use these funds to make a profound difference in the education of future physicians from Georgia,” Mercer University President William D. Underwood said. “These funds will directly support future physicians who demonstrate a commitment to providing primary care in areas of the greatest need.”
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