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May 16, 2008


DiNapoli: Medicaid Incorrectly Paid $3 Million in Payments

Updating Enrollment Information Could Have Saved Tax Dollars

Medicaid inappropriately paid approximately $3 million in fee-for-service claims for recipients enrolled in three managed care plans according to an audit released today by State Comptroller Thomas P. DiNapoli. The payments occurred because the State Department of Health (DOH) did not update managed care enrollment information for the recipients in a timely manner.

“The Department of Health is responsible for ensuring that hospitals fully comply with Medicaid regulations,” DiNapoli said. “What we have here is a failure to communicate, and that failure cost taxpayers $3 million.”

DiNapoli’s auditors reviewed Medicaid claims information for recipients enrolled in three managed care plans for the two year audit period ended September 30, 2007. The audit determined fee-for-service payments were for services included as covered services in the managed care plans, and these services should not have been billed separately as fee-for-service claims.

According to the DiNapoli report, these inappropriate payments occurred because the managed care enrollment information was not properly updated to the Medicaid eligibility files used to process Medicaid claims. Of the 3,750 recipients with late enrollment updates, 3,659 (98 percent) were newborns whose mothers were enrolled in a managed care plan. If a hospital does not update birth and Medicaid coverage information within the required time frame, the newborn’s Medicaid eligibility remains fee-for-service. This delay allows the hospital to inappropriately bill Medicaid for services that should have been billed to the managed care plan.

The report recommends that the Department of Health investigate and recover inappropriate Medicaid payments and ensure managed care plan enrollment information is updated timely. It also recommends that the Department continues efforts to gain full hospital compliance with Medicaid regulations requiring the reporting of live births within five business days. The DiNapoli report noted that the Department of Health has generally agreed with the audit’s findings and recommendations, and have already taken actions to implement them.

Click here for a copy of the audit.

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