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October 16, 2007


DiNapoli: Medicaid Providers Double Billed
State for Medicare Part B Services

The State Department of Health (DOH) overpaid about 2,000 medical providers an estimated $600,000 for Medicare Part B services, according to an audit released today by State Comptroller Thomas P. DiNapoli. Auditors found that providers double billed the state for Medicare Part B deductibles and identified one provider who submitted fictitious information to receive higher payments.

“This is clearly a widespread problem and we may have only revealed the tip of the iceberg,” DiNapoli said. “More internal controls must be built into the Medicaid system to prevent questionable payments from ever being made. The State Department of Health has agreed to strengthen internal controls, but too much taxpayer money is being wasted.”

Many of the state’s Medicaid recipients are also eligible for the federal Medicare program, which provides inpatient, outpatient and prescription drug coverage. Outpatient coverage, referred to as Medicare Part B, pays for services such as doctor visits, laboratory tests and blood work. Those individuals enrolled in Medicare Part B pay a $131 annual deductible as well as a coinsurance amount. For patients, who are eligible for both Medicare and Medicaid, Medicaid pays for the annual deductible and the coinsurance amount.

After reviewing reimbursements from January 2003 to November 2006, auditors found a common billing problem among approximately 2,000 providers. Auditors found more than 10,000 instances where providers appear to have double billed Medicaid for the Medicare deductible amount. The amount of overpayments is likely significantly higher because auditors were only able to review a small portion of the more than $19 million the state paid to approximately 11,000 providers during the audit period. The Comptroller’s office is currently working with state and federal agencies to access the remaining payments to determine the full scope of this problem.

Auditors examined the records of four service providers who showed the highest amount of overpayments. They identified one provider who was overpaid $53,000 for submitting claims to cover both the patient’s annual Medicare deductible and a fictitious coinsurance amount for the same recipient on multiple dates of service. This provider frequently billed Medicaid prior to receiving a Medicare payment, which is not allowed, and always reported incorrect Medicare payment information. The provider was also paid about $7,700 by Medicaid to cover Medicare deductibles for the same patient in the same year, when the provider was entitled to only $100.

The audit findings related to all four providers were referred to the Office of Medicaid Inspector General for further review.

Auditors recommended that DOH develop controls in the eMedNY system to track Medicare deductible claims and prevent excessive and double billing. They also recommended that DOH investigate and recover all overpayments to providers and clarify billing rules for providers. DOH agreed with the audit findings and indicated they were taking corrective action in response to the audit. DOH’s full response is included in the audit.

Click here for a copy of the audit.

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 State Comptroller’s Office identified nearly $37 million in potential overpayments or inappropriate claims paid by the state’s Medicaid program.

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