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NEWS from the Office of the New York State Comptroller
Contact: Press Office 518-474-4015


DiNapoli: Audit Finds $6.8 Million in Medicaid Overpayments

November 30, 2016

New York state’s Medicaid system made approximately $6.8 million in inappropriate payments, including $3.5 million for separately billed medical services that should have been covered by managed care plans, according to an audit released today by State Comptroller Thomas P. DiNapoli. By the end of audit fieldwork, about $2.4 million of the overpayments were recovered.

“New York’s Medicaid system is vast and complex with plenty of opportunity for waste and abuse,” DiNapoli said. “My auditors found several cases in which the Department of Health’s eMedNY system failed to catch millions in overpayments. To its credit, the department is working to recoup these overpayments and make adjustments to its processing systems to prevent these problems from reoccurring.”

New York’s Medicaid program, administered by the state Department of Health (DOH), is a federal, state, and locally funded program that provides a wide range of medical services to those who are economically disadvantaged or have special health care needs.

DOH’s eMedNY computer system processes Medicaid claims submitted by providers for services rendered to Medicaid-eligible recipients and generates payments to reimburse the providers for their claims.

DiNapoli’s office audits Medicaid payments on a routine basis to make sure claims are being paid appropriately and to determine if improvements are needed and whether money should be recovered because of errors, abuse or fraud. In 2015, DiNapoli’s auditors identified problems or irregularities with $223 million in payments.

DOH pays Medicaid providers through the fee-for-service method and the managed care plan method. Under the fee-for-service method, Medicaid pays health care providers directly for Medicaid-eligible services rendered to Medicaid recipients. Under the managed care plan method, Medicaid pays each managed care plan a monthly premium for each enrolled recipient and the plan arranges for the provision of services to its members. Plans typically have networks of participating health care providers that they reimburse directly for services provided to their enrollees. Generally, the costs of all services that plan enrollees require are covered by monthly premiums.

DOH uses eMedNY to make Medicaid payments to participating health care providers and managed care plans. The system is used to determine whether claims are eligible for reimbursement. For example, eMedNY will deny fee-for-service claims for services that are covered by a recipient’s managed care plan.

DiNapoli’s audit identified $3,521,562 in overpayments for 14,983 fee-for-service clinic claims that were inappropriate. The claims were processed on behalf of 3,504 recipients who were enrolled in a particular managed care plan.

Auditors determined the services were covered by the plan and therefore, fee-for-service claims should not have been paid. A data entry error in eMedNY allowed clinic services for enrollees of this plan to be processed as fee-for-service. After being alerted to the issue, DOH immediately updated eMedNY to prevent future inappropriate payments.

DiNapoli’s auditors also found:

  • $1,342,307 in overpayments for claims billed with incorrect information pertaining to other health insurance coverage that recipients had; 
  • $937,424 in overpayments for newborn claims that were submitted with incorrect birth weights;
  • $389,813 in improper payments for inpatient, clinic, durable medical equipment, transportation, and eye care services;
  • $333,504 in improper payments identified by the Centers for Medicare & Medicaid Services that DOH did not recover from providers;
  • $260,330 in overpayments for inpatient claims that were billed at a higher level of care than what was actually provided; and
  • $50,767 in improper payments for duplicate billings.

Additionally, auditors identified 15 Medicaid providers who were charged with or found guilty of crimes that violated the laws or regulations of a health care program. In addition, auditors found three providers who were involved in civil settlements. They advised DOH officials of the 18 providers and DOH terminated 14 of them from the Medicaid program. Another was also terminated from the program following the audit, according to DOH.

DOH officials generally agreed with the audit recommendations and indicated that certain actions have been and will be taken to address them. DOH’s full response is included in the complete audit.

Read the report, or go to:

For access to state and local government spending and more than 50,000 state contracts, visit The easy-to-use website was created by DiNapoli to promote openness in government and provide taxpayers with better access to the financial workings of government.