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April 18, 2012

 

DiNapoli: Audits Reveal More Than $40M in Improper Payments Made by State's Medicaid Program


Two audits released today revealed that data problems and delays in posting information to eMedNY, New York’s Medicaid claims processing system, caused $36 million in improper payments and another $6.3 million in overpayments, according to New York State Comptroller Thomas P. DiNapoli.

“New York State has the largest Medicaid system in the country,” DiNapoli said. “Too many of our audits have found that Medicaid dollars are improperly spent or wasted because safeguards were not in place to catch problems. While some money has been recouped, this system must work better for the taxpayers of New York.”

In an audit examining the period of June 1, 2007 through May 31, 2010, DiNapoli’s office looked at whether the Department of Health (DOH) made premium payments to Medicaid managed care plans for “dual-eligible” enrollees.  These individuals are enrolled in both Medicare, the federal health insurance program for those over 65 or those with disabilities, as well as Medicaid, the federal, state and local health insurance program for low income and financially-needy people. DOH regulations state that dual-eligible recipients should not be enrolled in managed care plans as the premium payments normally exceed what Medicaid would have paid for a recipient’s coinsurance and deductibles.

Auditors identified about 271,000 unnecessary Medicaid payments totaling about $111 million made on behalf of 45,000 ineligible Medicare recipients. Had Medicaid paid only deductibles and coinsurance, the total payments would have been $75 million, meaning taxpayers paid $36 million improperly. The underlying cause for this oversight is delays in posting Medicare data to eMedNY and delays in disenrolling those individuals from managed care plans once information had been posted.

In the first instance, DOH improperly paid 207,425 monthly premiums totaling $86.2 million for 32,165 Medicaid recipients because their Medicare enrollment data was not posted to eMedNY in a timely manner.


Length of Delay in Posting Medicare Eligibility Date to eMedNY

Number of Improper Managed Care Claims Paid by eMedNY

Dollar Amount of Improper Premium Payments

Less than 31 Days

 23,433

$10,073,006

31 to 60 Days

 19,573

$ 8,169,249

Over 60 Days

164,419

$67,953,006

Totals

207,425

$86,195,261

DOH also provides counties with rosters that include Medicare eligibility data for recipients currently enrolled in a Medicaid managed care program. However, localities, working with an enrollment broker, did not disenroll recipients in a timely manner and, as such, DOH continued to pay for Medicaid managed care premiums.  DOH improperly paid 63,327 monthly premiums totaling $25.2 million for 32,607 dual-eligible recipients. 

Period Between Date Medicare Data was Posted to eMedNY and Date Managed Care Premium was Paid

Number of Improper Managed Care Claims Paid by eMedNY

Dollar Amount of Improper Premium Payments

Less than 31 Days

 1,654

$    992,781

31-60 Days

24,463

$11,019,279

Over 60 Days

37,210

$13,246,827

Totals

63,327

$25,258,887

In a second audit that examined whether eMedNY ensured that Medicaid claims were processed correctly over a six-month period ending on March 31, 2011, DiNapoli’s office found approximately $6.3 million in actual and suspected overpayments, of which $3.2 million has been recovered.  Claims and transactions outside of the audit scope period were examined in instances where a pattern of problems was identified.

Within the audit period, eMedNY processed approximately 174 million claims resulting in payments to providers of about $25 billion. Various automated edits throughout the process are used to determine claim eligibility. In many instances, auditors found that inaccuracies and incorrect information caused overpayments or questionable payments including:
           

  • Two hundred and seventeen claims for dual-eligible recipients resulted in $2.9 million in incorrect and questionable payments. 198 of these were corrected, saving $2.35 million.  146 of these were because Medicare was incorrectly designated as the primary insurer.
  • $2.3 million in overpayments was identified on claims for inpatient stays because providers billed at a higher level of care than what was actually provided.
  • $1.1 million in claims was reviewed, of which $625,000 (57 percent) were potential overpayments for durable medical equipment such as bed and air mattresses and wheelchairs.
  • Medicaid payments for neonatal services are based on several factors, including birth weight and patient status code for actions such as discharge or transfer to another hospital.  Thirty seven problematic newborn claims were identified, resulting in potential overpayments of $454,698, of which adjustments have been made totaling $112,410. Of this total, incorrect birth weights were a cause of overpayments in 28 of the 37 newborn claims, resulting in a potential net overpayment of $203,166.
  • Of 162 transportation claims for medical services, 98 were determined to be improper because they lacked documentation, had no record of corresponding medical service or had incorrect recipient addresses.  Improper claims totaled $12,495.

DiNapoli’s auditors made several recommendations for taking necessary corrective actions on these issues and recovering funds, many of which DOH agreed with. DOH’s responses to the recommendations are included in the audits.




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