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Ala trying to avoid repaying $88M to Medicaid

MONTGOMERY, Ala. (AP) -- The federal government said Alabama received almost $90 million too much from Medicaid over a two-year period and should repay the money, but the head of the state agency said Wednesday he hopes to reduce the amount through negotiations.

States can get bonus money for increasing enrollment in children's programs, and a report from the Office of Inspector General said the federal government gave Alabama too much bonus money in 2009 and 2010 because the state used improper calculations to compute how many children participated in its program.

State Health Officer Don Williamson, who oversees Alabama's Medicaid program, said the agency made an "honest mistake" that resulted in the state's report being off by about 90,000 children because it computed enrollment on a total annual basis rather than on an average monthly basis.

"They acted in good faith in both '09 and 2010," he said.

The Inspector General's report said 92 percent of the bonus money paid to the state was improper, however.

Williamson said the state will begin negotiations with the Center for Medicaid Services within a month to avoid having to repay the entire $88 million. The federal government owes the state $35 million in bonus money for 2011 and 2012, when the state used the proper calculation method, and the state is hoping to deduct that amount from its bill, Williamson said.

Williamson said he hopes to get the amount "as close to zero as possible," but added the state likely must repay at least some of the money.

Repaying a large amount of money would force either new legislative appropriations or taking money from other departments funded through the state's operating budget, he said.

"It's not like there's a pool of money we can use to pay this back," Williamson said.

The state Medicaid budget already faces a hole of at least $130 million in fiscal year 2015, and talks with federal officials are vital to preventing the situation from worsening, he said.