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Feds want New York to return $60.8M for Medicaid

WASHINGTON -- New York State's Medicaid program should refund $60.8 million for three years of federal reimbursements that it claimed for residential services costs not allowed by law, the inspector general of the U.S. Department of Health and Human Services said in an audit released Tuesday.

The audit was the latest in a continuing dispute between the federal government and New York State over federal cost reimbursements in the federal-state Medicaid program for low-income residents.

The audit said the reimbursements in question were for the costs of repairs, maintenance, utilities and property at state-operated residences for people with developmental disabilities.

Gov. Andrew M. Cuomo's press office did not immediately respond to a request for comment. But the state Health Department said in a February letter included in the audit that it "disagrees" with the recommendation that it should refund $60.8 million to the federal government.

The state letter said it was "reasonable" to use the methodology the state had devised to comply with the federal exclusion of the costs in dispute. The state said it had revised its methodology after a 2010 HHS ruling on which costs could be included.

Under the Medicaid program, the state and federal government split the cost of providing health and other care for low-income residents.

New York State claimed $5.3 billion, which includes the federal government's share of $2.6 billion, for services of the state-operated residences from 2009 through 2011, the audit said.

The disputed amounts during those three years totaled $121.5 million -- including the federal share of $60.8 million.

In March, an HHS inspector general audit said federal Medicaid payments for the state-operated residences in 2010 "exceeded actual costs" by 57 percent, or $320 million.

The state responded in a letter that it had submitted a new way to calculate costs to federal Medicaid officials.

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