But the state disagrees.
In 2009 and 2010, Alabama received approximately $95 million for Medicaid's children's insurance program.
The program provided this money via "bonus payments," or funds given to help states pay for an increase of children enrolled in Medicaid programs.
However, 92 percent — or $88.2 million — of the bonus payments were "not allowable in accordance with Federal requirements," the IG found.
By using the correct enrollment numbers — not the ones Alabama exaggerated by an average of 92,800 per year — the Center for Medicaid and CHIP Services calculated that the state should have received $1,486,012 and $5,687,907, respectively.
Alabama sidestepped federal law and asked for bonus payments based on the number of children enrolled in Medicaid programs each year, not the required monthly average of children enrolled.
The HHS inspector general recommended that future bonus payments be determined using the monthly average — and the state agreed.
However, when the inspector general's office demanded a refund of the $88 million, Alabama refused.