State Comptroller Thomas P. DiNapoli today released three reports that found more than $100 million in improper payments made by the Department of Health (DOH) for the Medicare buy-in program, maternity care, and drug and therapy claims. Nearly $400,000 in premiums may have been paid for deceased individuals.

“The Medicaid program provides critical health care services to millions of New Yorkers but the program is dogged by oversight problems and payment errors,” DiNapoli said. “Over the years, we’ve uncovered billions of dollars of waste and abuse in the system. DOH should act on our recommendations to ensure significant unnecessary expenses and preventable mistakes don’t end up costing taxpayers.”

The New York State Medicaid program is administered by DOH and is a federal, state, and local government funded program that provides a wide range of medical services to economically disadvantaged populations, including low-income children and their families, seniors, and people with disabilities. As of March 2021, New York’s Medicaid program had approximately 7.3 million recipients and claim costs totaled more than $68 billion.

Improper Medicare Payments

The first audit released today looked at Medicaid recipients who are also enrolled in Medicare. Under the Medicare buy-in program, Medicaid pays Medicare premiums for individuals who meet buy-in program eligibility requirements. Auditors found Medicaid made $31.7 million in improper Medicare premium payments from Jan. 1, 2015 through Dec. 31, 2019 for 42,586 individuals. Medicaid also paid $372,716 in Medicare premiums for 282 individuals identified as deceased. Auditors found Medicaid paid $23.6 million in premiums for 3,439 individuals who were automatically added to the buy-in program with coverage beginning more than two years retroactively, despite limitations on this.

Questionable Managed Care Payments

The second audit released examined Medicaid recipients who receive their services through managed care. DOH pays managed care organizations (MCOs) a monthly premium for each enrolled recipient and, in turn, the MCOs pay for services their members require. MCOs can also receive a one-time Supplemental Maternity Capitation Payment (SMCP) for prenatal and postpartum physician care and delivery costs. However, MCOs are not eligible to receive SMCPs for maternity cases that end in termination or a miscarriage.

Auditors identified approximately $55 million in improper and questionable SMCPs to MCOs from Aug. 1, 2015 to July 31, 2020. They found $29.1 million was paid without the required supporting data; $23.4 million was paid where the data or other evidence indicated the maternity case ended in termination or miscarriage; and $2.4 million was paid when the SMCP date of service preceded the birth by one to six months.

Overpayments for Prescription Drugs

A report released in October 2019 examined payments made for prescription drugs and therapy services. It found Medicaid paid $20.1 million for services that should have been paid by Medicare. The payments included $18.6 million for physical, occupational, and speech therapy services, and $1.5 million for prescription drugs. A follow-up report released today found DOH made some progress in addressing the prior problems identified; however, since the initial audit, auditors identified another $17.7 million in payments that should have been paid by Medicare.

DOH generally agreed with many of the recommendations that DiNapoli’s auditors provided in each audit. Read DOH’s responses in the reports.

Audits

• Department of Health Medicaid Program: Improper Payments of Medicare Buy-In Premiums for Ineligible Recipients
• Department of Health Medicaid Program: Improper Supplemental Maternity Capitation Payments to Managed Care Organizations
• Department of Health Medicaid Program: Overpayments for Therapy Services and Prescription Drugs Covered by Medicare (Follow-Up)

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