Prairie State Wire

Following an internal review, the Department of Healthcare and Family Services (HFS) and the Illinois Department of Human Services (IDHS) discovered a computer programming error that resulted in incomplete federal Medicaid match claims. This error affected federal revenue reimbursements for Medicaid-related programs in Illinois. Despite this delay, there was no impact on payments to organizations providing services or on the implementation of developmental disability services.

The review revealed that a technical coding error disrupted communication between IDHS and HFS, delaying claims for federal Medicaid reimbursement for community-based services for individuals with developmental disabilities. The issue affected submission files to HFS for service dates from late 2020 to June 2022, totaling $601 million in federal match—less than 2% of what HFS received in federal revenues during that period. Increased Medicaid spending and enhanced federal match rates masked these delayed reimbursements.

The programming error has been corrected, allowing IDHS to transfer completed files to HFS so they can submit outstanding claims to the federal government. Most of the spending remains claimable, and HFS plans to seek a federal waiver for older bills impacted by the delay. An additional $250-$300 million in federal claiming was delayed for FY23 before implementing the programming fix; these amounts will be claimed in FY24.

IDHS and HFS have informed their external auditors about the delayed reimbursement as part of their annual financial audit process after assessing the scope of impacted bills.