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DiNapoli Finds Medicaid Billing Errors of Nearly $1 Billion

April 19, 2022

The state Department of Health (DOH) made $965 million in payments to providers, including facilities, for services ordered, prescribed, referred, and attended by practitioners who were not enrolled in the health care program, including those who had been barred due to misconduct, according to an audit released today by State Comptroller Thomas P. DiNapoli. Two other audits released today found an additional $17 million in overpayments.

“Medicaid is a critically important program, but its payment system is rife with errors,” DiNapoli said. “My auditors found the system was allowing payments on claims involving providers who were not certified to treat Medicaid patients. This not only costs taxpayers, but also allows providers who should be excluded, and may be unqualified, to treat patients. DOH must improve its efforts to fix the shortcomings with its billing system.”

The New York State Medicaid program provides a wide range of medical services to low-income New Yorkers or to those who have special health care needs. For the state Fiscal Year ended March 31, 2021, New York’s Medicaid program had approximately 7.3 million recipients and Medicaid claim costs totaled $68.1 billion.

Auditors found eMedNY, DOH’s Medicaid claims processing system, allowed improper payments for services involving ordering, prescribing, referring, and attending providers who were no longer actively enrolled in the Medicaid program at the time of the service. The improper payments included $5.8 million for services involving providers who were excluded from participating in Medicaid due to past improper behavior or wrongdoing.

The audit covered the period of January 2015 to December 2019. DiNapoli noted DOH made changes to eMedNY in February 2018 which led to a significant drop in the amount of improper payments. However, for the period March 2018 through December 2019, auditors still identified about $45.6 million in claim payments for 135,476 services by ineligible providers.

DiNapoli’s auditors noted that when inactive providers are included on Medicaid claims, DOH lacks assurance those providers can furnish such services, and it increases the risk that excluded, or otherwise unqualified, providers are treating Medicaid enrollees.

DiNapoli recommended DOH:

  • Review the $965 million in payments for Medicaid claims involving inactive providers and determine an appropriate course of action;
  • Enhance controls to prevent improper Medicaid payments for claims that do not report an active provider; and
  • Update guidelines to clarify billing requirements.

Department officials generally agreed with most of 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 audit.

A second audit found that from January 2016 through December 2020, DOH potentially overpaid $9.6 million for durable medical equipment, prosthetics, orthotics, and supplies that likely should have been provided by nursing homes as part of the daily all-inclusive rate paid to those facilities.

A third audit covering Medicaid claims processing for the six months ended March 31, 2021 found nearly $7.4 million in improper Medicaid payments, including $3.3 million paid for fee-for-service inpatient claims that should have been paid by managed care or that were also reimbursed by managed care, and $1.5 million paid for inpatient claims that were billed at a higher level of care than what was actually provided. Auditors contacted providers and by the end of the audit fieldwork, about $5.6 million of the improper payments had been recovered.

Audits

Medicaid Program: Improper Payments for Services Related to Ordering, Prescribing, Referring, or Attending Providers No Longer Participating in the Medicaid Program.

Medicaid Program: Improper Medicaid Managed Care Payments for Durable Medical Equipment, Prosthetics, Orthotics, and Supplies on Behalf of Recipients in Nursing Homes.

Medicaid Program: Claims Processing Activity October 1, 2020 Through March 31, 2021.


Track state and local government spending at Open Book New York. Under State Comptroller DiNapoli’s open data initiative, search millions of state and local government financial records, track state contracts, and find commonly requested data.