OIG recommends South Carolina reconcile $108.6 million federal-share collections
Oct 11, 2026 edition · GC-2026-0193 · Published 2026-10-11 · Version 4 · Final
OIG found approximately $108.6 million in underreported federal-share Medicaid and CHIP collections in South Carolina. The issue involves COVID-era matching-rate calculations, not a provider penalty. The state concurred with three of four recommendations; the report does not confirm completed refunds.
What happened
OIG’s South Carolina audit, OAS-25-04-114, was issued September 30 and posted October 2. It found that the state did not accurately calculate and report approximately $108.6 million in the federal share of Medicaid and CHIP collections subject to increased COVID-19 matching rates. Collections include recovered overpayments, refunds and similar receipts that reduce net program expenditures and the federal funding due. The temporary increases were 6.2 percentage points for Medicaid and 4.34 percentage points for CHIP, making the applicable rate material to the federal share.
OIG made four recommendations, including adjustment of future CMS reports and refund of approximately $108.6 million in underreported collections, with $8.6 million relating to the first quarter of the increased rate. It also recommended reporting amounts supported by accounting records and written procedures for unexpected or retroactive matching-rate changes. South Carolina concurred with three recommendations and described actions taken and planned. The finding concerns state financial reporting; it is not a fine imposed on providers or proof that every recommended refund has been paid. The earlier $61.8 million audit discussed as background is a separate figure.
Scope and timing
- Authority status
- Final
- Applicability
- Operationally relevant
- Audience
- Health systems, Provider networks
- Jurisdiction
- Federal
Why it matters
The action identifies a control failure relevant to provider, payer or vendor oversight. Its procedural status must be kept separate from any allegation.
Recommended action
Assess documentation and allocation controls relevant to the organization. Distinguish disputed audit recommendations from an established refund obligation.
Case details
- agencies
- HHS OIG
- entities
- South Carolina Medicaid and CHIP
- action Type
- Audit
- event Date
- 2026-09-30
- alleged Conduct
- OIG reports South Carolina did not report approximately $108.6 million in Medicaid and CHIP federal-share collections subject to the increased COVID-19 FMAP. The report contains refund and reconciliation recommendations, not an adjudicated settlement.
- resolution
- OIG audit recommendations, not a settlement or court judgment.
Operational lessons
- Assess documentation and allocation controls relevant to the organization. Distinguish disputed audit recommendations from an established refund obligation.
Sources
- OIG recommends South Carolina reconcile $108.6 million federal-share collectionsOfficial · HHS OIG · 2026-10-02 · Source review 2026-10-11
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