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January 17, 2008


DiNapoli: $5 Million Found in Improper Medicaid Payments

Audits Find Pharmaceutical and Equipment Suppliers May Have Been Paid Twice

The Department of Health (DOH) paid an estimated $3.1 million in potentially inappropriate Medicaid payments to medical equipment suppliers and just over $2 million in potentially inappropriate payments to pharmaceutical suppliers serving nursing homes, according to two audits released today by State Comptroller Thomas P. DiNapoli. Certain matters in the audit have been referred to the state Office of the Medicaid Inspector General for further review and investigation.

“DOH has to track spending closely to make sure every Medicaid dollar is spent appropriately,” said DiNapoli. “New York can’t afford to pay for the same supplies twice.”

Some nursing homes receiving Medicaid payments on behalf of patients who are Medicaid recipients are required to use that money to pay suppliers. Suppliers generally do not charge the state directly unless patients are being or have been discharged from their nursing home. In audits that covered the period March 2002 to February 2007, auditors found that the state paid suppliers directly for services they provided while patients were in nursing homes. Because of this, Medicaid paid twice for the same service because both the nursing home and the supplier received payment.

To correct the problems identified in the audits, DiNapoli recommended that DOH:

  • review the more than $5 million in payments identified in the audits and recover inappropriate payments;
  • tighten payment controls to prevent future overpayments;
  • ensure that suppliers understand what their responsibilities are when billing for services; and
    work with local social service departments to ensure the state’s billing system is up-to-date concerning a patient’s admission and discharge status.

Officials generally agreed with the audits’ findings, indicating they would take corrective action.

About the State Comptroller’s Medicaid Oversight
The Office of the State Comptroller conducts regular audits of the state’s $47 billion Medicaid program, identifying hundreds of millions of overpayments and fraud. Auditors review Medicaid claims that have been submitted by service providers and identify billing patterns and other circumstances that warrant an examination to determine whether claims are valid and appropriate. In 2007 alone, the Comptroller’s Office identified nearly $62 million in potential overpayments or inappropriate claims paid by the state’s Medicaid program.

Click here for the audit on medical equipment suppliers.

Click here for the audit on pharmaceutical suppliers.


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