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March 19, 2009



DiNapoli: New York’s Medicaid Program Allows
Significantly More Diabetic Testing Supplies Than Others

Audit Raises Questions about $90 Million in Claims

New York’s Medicaid program allows recipients to obtain considerably more diabetic testing supplies than the federal Medicare program and 10 other states’ Medicaid programs, according to an audit released today by State Comptroller Thomas P. DiNapoli. Auditors also found problems with the State Department of Health’s (DOH) claims processing system that led to more than $90 million in questionable claims.

“New York’s Medicaid program is the most expensive Medicaid program in the nation,” DiNapoli said. “We need to make sure that the program provides the quality health care New Yorkers need at a price New York can afford. This is a $45 billion a year program. We have to make sure it runs right, and we have to make sure we do everything possible to eliminate Medicaid fraud, waste and abuse.”

Medicaid is the state health benefit program for low-income New Yorkers. The audit, which covered a five-year period ended June 2008, compared the amount of diabetic testing supplies provided by New York’s Medicaid program with Medicare and the Medicaid programs in 10 other states. During the audit period, New York’s Medicaid program spent approximately $267 million on diabetic testing supplies.

Auditors found that New York’s Medicaid program had the highest limits for diabetic testing supplies of all the states reviewed, and more than double the amount of supplies that Medicare allows. If New York had similar limits to the Medicare program, it could have saved approximately $13.8 million during the audit period. The breakdown of what other states allow:

State

Test Strips Per Year

Lancets Per Year

California

3,200

3,200

Florida

4,200

2,400

Massachusetts

1,000

1,200

Michigan

2,400

2,400

Minnesota

2,400

4,800

New Jersey

3,600

3,600

North Carolina

2,400

2,400

Ohio

2,400

2,400

South Carolina

1,800

3,600

Virginia

1,800

1,800

Average of 10 States

2,520

2,780

New York

4,500

9,000

Medicare

1,200

1,200

In addition, New York’s program also does not have different limits on test strips or lancets based upon whether a recipient is insulin dependent or not. Generally, non-insulin dependent diabetics test their blood glucose levels less than insulin dependent diabetics and generally need less testing supplies.

DOH said it would evaluate the state’s current guidelines on quantity of testing supplies provided to recipients and investigate the potential abuses of the system. DOH’s response is included in the audit.

Auditors also found that DOH’s claims processing system, eMedNY, does not prevent providers (pharmacies) from billing for or recipients from obtaining more diabetic testing supplies than what New York guidelines allow. For example, one recipient received 9,650 test strips in a one-year period by going to multiple pharmacies, including 2,900 test strips in one month. The recipient would have had to test his or her blood sugar 96 times a day to use all of the 2,900 test strips in that month. Nine of the 10 states examined as part of the audit said they limit diabetic testing supplies by recipient, not by provider as New York does.

Auditors also found several major inconsistencies in more than $90 million of supplies provided to 227,394 recipients. New York allows recipients to receive two lancets, the devices used to obtain a drop of blood for testing, for every test strip to read blood sugar levels. Six of the 10 states contacted, as well as Medicare, have a one lancet to one test strip ratio. Based on New York’s current guidelines, auditors found:

  • $68.2 million was paid for 120,273 recipients who received more test strips than lancets;
  • $21.2 million was paid for 48,235 recipients who received test strips but no lancets;
  • $1.1 million was paid for 55,322 recipients who received more lancets than test strips; and
  • $38,000 was paid for 3,564 recipients who received lancets and no test strips.

The audit recommends DOH:

  • Consider changing the diabetic testing supply limits that recipients are allowed to obtain each year without prior approval, establishing different limits for insulin and non-insulin dependent diabetics, and making the limit on test strips equal to the limit on lancets;
  • Modify eMedNY to prevent recipients from receiving more testing supplies than allowed and consider limiting supplies by recipient rather than provider; and
  • Investigate supplies provided to recipients that were excessive.

About the State Comptroller’s Medicaid Audits:
The Office of the State Comptroller conducts regular audits of the state’s $45 billion Medicaid program. 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.

Click here for a copy of the audit.

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