January 26, 2018

State of Alabama
Press Release: Medicaid

Medicaid Credit Balance Audits

PDF Version

TO: All Providers

As required by federal law, the Alabama Medicaid Agency audits hospital reports and records to determine if overpayments involving Medicaid outpatient and inpatient accounts exist.  The audits are conducted by the Agency’s contractor, Health Management Systems. As an agent of the Alabama Medicaid Agency, HMS has authorization to access and review patient financial records involving Medicaid accounts.

HMS’s reviews will focus on transactions affecting the financial accounts of selected Medicaid recipients.  HMS will inform the Medicaid Agency of all outpatient and inpatient overpayments as well as third party payments made to the hospital and not credited to Medicaid. 

As a condition of participation in the Medicaid program, all providers agree to determine the legal liability of third parties to pay for services provided to Medicaid recipients and to comply with state Medicaid third party liability recovery requirements. To that end, providers are expected to make all requested patient financial records available to HMS representatives and to have patient billing staff present when on-site audit visits are made.

Provider questions should be directed to Shari Rudd at 334-353-3403 or shari.rudd@medicaid.alabama.gov


Authority: Under Section 1902(a) (25) of the Social Security Act provides, “State agencies administering their Medicaid program will take all reasonable measures to determine the legal liability of third parties to reimburse for services arising from injury, disease or disability.”  Pursuant to Title 42 Chapter IV Part 433.139 of the Code of Federal Regulations and the authority cited therein, Medicaid providers are subject to reviews in order to ensure compliance with State Medicaid third party liability recovery requirements. 



  • For more information, visit http://medicaid.alabama.gov
  • For more state-wide press releases, click here