Purpose

To determine the implementation status of the five recommendations made in our initial audit report, Reducing Medicaid Costs for Recipients With End Stage Renal Disease (Report 2015-S-14).

Background

We issued our initial audit report on March 1, 2017. The audit objective was to determine whether the Department of Health (Department) took sufficient steps to control the Medicaid costs of recipients diagnosed with end stage renal disease (ESRD) who were eligible for, but not enrolled in Medicare. Medicaid recipients with ESRD may be eligible for Medicare coverage if they meet certain conditions. When Medicaid recipients are enrolled in Medicare, Medicare becomes the primary insurer (payer) and Medicaid the secondary. As a secondary payer, rather than pay for the medical service itself, Medicaid pays the recipient’s Medicare premiums, deductibles, and coinsurance amounts, which allows for a significant Medicaid cost avoidance. Our audit determined the Department did not effectively control the Medicaid costs of recipients diagnosed with ESRD. During our initial audit, we identified 3,015 Medicaid recipients with ESRD who met the Medicare eligibility criteria, but who were not enrolled in Medicare at the time their medical services were provided. Had the Department informed the recipients about their entitlement to Medicare and helped them enroll, the Medicaid program could have saved as much as $146 million over the six-year audit period ended December 31, 2015. Furthermore, we estimated the Medicaid program could have saved as much as $69 million over the next three years subsequent to the initial audit period.

We recommended that the Department: identify Medicaid recipients diagnosed with ESRD and instruct them on how and where to apply for Medicare; develop an outreach program that encourages ESRD-related providers and stakeholders to inform ESRD recipients about Medicare benefits and actively aid recipients in applying for Medicare; follow up with Medicaid recipients who do not apply for Medicare; and recover Medicaid claims paid for any retroactive Medicare enrollments of ESRD recipients.

Key Finding

Department officials have made progress addressing the problems identified in the initial audit. For instance, the Department now identifies and notifies ESRD recipients about their potential eligibility for Medicare. Additionally, the Department contracted with enrollment facilitators to provide education and outreach to ESRD recipients to aid them in applying for Medicare. Of the initial report’s five audit recommendations, one was implemented, three were partially implemented, and one was not applicable during the time of our follow-up.

Key Recommendation

Officials are given 30 days after the issuance of the follow-up report to provide information on any actions that are planned to address the unresolved issues discussed in this report.

Other Related Audit/Report of Interest

Department of Health: Reducing Medicaid Costs for Recipients With End Stage Renal Disease (2015-S-14)