ANNAPOLIS, Md. — A new state audit found Maryland’s Medicaid office failed to correct repeated oversight problems, including missing nursing facility reviews, questionable payments for incarcerated or deceased recipients, delayed home-based care approvals and unexplained gaps between Medicaid and state accounting records.
The Office of Legislative Audits released the May 2026 fiscal compliance audit of the Maryland Department of Health’s Medical Care Programs Administration, which administers Medicaid in Maryland. The audit covered the period from April 1, 2022, through March 31, 2025.
Auditors concluded the administration’s accountability and compliance level remains “unsatisfactory,” citing the significance of the findings and the number of repeat findings from previous audits.
The Medical Care Programs Administration oversees Maryland Medicaid, which provides health care coverage to eligible residents. The audit said the agency had approximately $16.7 billion in fiscal year 2025 expenditures, including about $10 billion in federal funds.
One of the largest findings involved continued stay reviews for Medicaid recipients in nursing facilities. Auditors found the administration did not ensure its utilization control agent contractor performed required reviews to verify that recipients still needed the level of care being billed to Medicaid.
According to the audit, 4,425 Medicaid recipients in nursing facilities did not receive a required continued stay review during calendar year 2024. Auditors said that left the state without assurance that related payments totaling $338.3 million were proper.
The report also found the administration lacked effective processes to identify, prevent and recover questionable Medicaid payments. Auditors identified $9.2 million in payments made on behalf of recipients who were incarcerated or deceased at the time of service.
That included $6.4 million in fee-for-service payments for 2,397 recipients who were incarcerated at the time of service, even though Medicaid generally only covers certain services, primarily inpatient hospital care, while a recipient is incarcerated.
Auditors also found $2.8 million in claims associated with services after recipients’ reported dates of death. The audit said a review of selected cases found some claims were paid after recipients had died, and the administration had recovered $178,000 as of December 2025.
Eligibility issues were also flagged. The audit found the administration did not ensure that problems identified with Medicaid eligibility determinations were corrected and did not ensure required annual eligibility redeterminations were completed on time. Auditors said the agency paid approximately $2.3 million in calendar year 2024 for 152 recipients who lacked required support for income and citizenship eligibility or were ineligible based on documentation provided.
The audit also found the agency did not ensure some recipients age 65 or older had applied for Medicare, as required by state regulations. Auditors said Medicaid paid approximately $145 million in calendar year 2024 for 4,873 recipients who were not enrolled in Medicare despite being potentially eligible based on age and coverage group.
Auditors said the issue matters because Medicare is federally funded, while Medicaid costs are partially paid with state funds. When a recipient is eligible for both programs, Medicare generally pays first and Medicaid covers remaining coinsurance or deductibles.
The audit also substantiated a fraud, waste and abuse hotline allegation involving delays in approving home and community-based service plans. Auditors found 842 initial service plans had been pending approval for more than 15 days as of June 2025, including 234 pending between three months and 2.5 years.
In a review of 20 updated plans, auditors found delays resulted in five recipients not receiving additional services, including environmental adaptations and transportation to appointments. The audit also found $430,000 in payments for services provided to 12 recipients even though their plans indicated certain services were no longer needed.
Auditors also found the administration did not ensure all Community First Choice recipients received required nurse monitoring visits. According to the report, 229 recipients had never had a nurse monitor visit despite receiving services for six months to 10.6 years, while 902 recipients were more than 60 days overdue.
Another finding said the administration did not ensure all referrals of potential third-party insurance were investigated and recorded in the Medicaid system. Auditors said approximately 292,000 of 396,000 referrals submitted by a third-party liability vendor between April 2024 and March 2025 were not recorded in the Medicaid Management Information System.
The audit also found the agency did not have procedures to reconcile Medicaid expenditures recorded in the Medicaid Management Information System with state accounting records. After auditors raised the issue, the administration found state accounting records exceeded Medicaid system expenditures by $15.4 million in fiscal year 2023 and $185.5 million in fiscal year 2024.
The Maryland Department of Health generally agreed with the audit recommendations but pushed back on the “unsatisfactory” rating, saying the report did not fully reflect corrective action progress and the complexity of operating one of the state’s largest federally regulated programs.
In its response, the department said the Medical Care Programs Administration has treated every finding as a priority and has taken corrective actions focused on internal controls, system automation and vendor oversight. The department said five of the 12 findings had been fully resolved and one additional repeat finding had been partially resolved since the conclusion of audit fieldwork.
Auditors stood by the rating, noting that the report covered conditions during the audit period and that many corrective actions cited by the department were completed after fieldwork or are expected to be completed in the future.
The audit also included a cybersecurity-related finding, but the details were redacted from the public report under state law.
Read the full Maryland Medicaid audit below:
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