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March 3, 2009



Health Department Wasting Millions on
Out-of-State Medicaid Payments

DOH Did Not Ensure Payments Were Investigated

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The State Department of Health (DOH) made $28.4 million in Medicaid payments for people who were enrolled in New York and another state’s Medicaid program, according to an audit released today by State Comptroller Thomas P. DiNapoli.

“Medicaid is the single most costly program administered by New York State,” DiNapoli said. “The state is facing the worst fiscal crisis of our lifetime. We can’t afford to waste millions of dollars on people who don’t live here. DOH has to cut Medicaid waste and abuse, and it can start by tracking down and stopping payments for out-of-state residents.”

DiNapoli’s auditors found that from April 1, 2004 through May 31, 2008, DOH paid about $14.1 million in Medicaid managed care premiums and about $14.3 million in fee-for-service payments for people who were also enrolled in another state’s Medicaid program.

Federal reports identify individuals who are enrolled in two or more states’ Medicaid program at the same time. Outside New York City, local social service districts are supposed to remove ineligible enrollees from the state’s program. In New York City, the Human Resources Administration (HRA) has that responsibility.

DiNapoli’s auditors found that DOH had not effectively ensured local social service districts and the HRA acted in a timely manner to either investigate the enrollees identified on the reports or to remove them from New York’s Medicaid program. Auditors found 27 districts spent, on average, more than 60 days to complete investigations.

DOH had not worked with the local social service districts and HRA to establish policies, procedures and time frames for completing investigations. Additionally, DOH had not set up monitoring mechanisms to track the completion of investigations.

DiNapoli’s auditors also found that while district investigators outside of New York City confirmed that $3 million in managed care premiums was paid for out-of-state residents, DOH had not tried to recover any of the money from managed care plans. New York City’s HRA had not even completed investigations of the remaining $11.1 million in inappropriate managed care premium payments.

The audit recommends that DOH:

  • effectively monitor the federal Medicaid reports, service district and HRA investigations and enrollee removal procedures;
  • work with social service districts and HRA to create policies, procedures and time frames for completing investigations of enrollees identified on the reports;
  • provide HRA with guidance to investigate fee-for-service cases;
  • examine fee-for-service cases to rule out fraud; and
  • recover state Medicaid funds that were paid for non-New York State residents.

DOH officials generally agreed with the audit’s recommendations and planned to take action.

Click here a copy of the audit and DOH’s full responses.

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