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DHR: FY25 payment-error rate reported at about 9.55%, raising state penalty exposure
Summary
Officials told the board Alabama’s FY25 payment error rate measured about 9.55%, placing the state above common 6% benchmarks and exposing it to an administrative cost-share; board discussed short-term timing and appeals for relief.
Agency official told the board that Alabama’s FY25 quality-control payment error rate was about 9.55%, a level officials said could trigger significant administrative cost-share obligations under new federal rules. The presenter described the measurement timing — that FY25 rates reflected cases certified in the prior fiscal year — and said that many operational changes implemented in the current fiscal year cannot retroactively affect FY25 grades.
"FY 25 and error rate came out. I’ve been telling you that it was gonna be about 9%. It was 9.55%." the Agency official said. Board members pressed staff on implications for state budgets; the presenter characterized the effect as more of a "cost shift" than a share and noted projected potential liability in the hundreds of millions based on FY25 issuance figures.
The board discussed advocacy options to federal officials for delay or broader relief, and later moved to ask the commissioner to write to Alabama’s congressional delegation requesting a two-year waiver or delay comparable to waivers granted to other high-error states.
