Medicaid Program – Improper Supplemental Maternity Capitation Payments to Managed Care Organizations

Issued Date
November 29, 2021
Health, Department of (Medicaid Program)


To determine whether Medicaid made improper Supplemental Maternity Capitation Payments to managed care organizations. The audit covered the period from August 1, 2015 through July 31, 2020.

About the Program

The Department of Health (Department) administers New York’s Medicaid program. Many of the State’s Medicaid recipients receive their services through managed care, whereby the Department pays managed care organizations (MCOs) a monthly premium for each enrolled recipient and, in turn, the MCOs pay for services their members require. In addition to the monthly premiums, MCOs can receive a one-time Supplemental Maternity Capitation Payment (SMCP) for the prenatal and postpartum physician care and hospital or birthing center delivery costs associated with the maternity care of a recipient. However, MCOs are not eligible to receive SMCPs for maternity cases that end in termination or a miscarriage, as these are considered reimbursed to the MCO through the monthly premium for the recipient. Further, an MCO is only eligible to receive the SMCP if it submits encounter data as evidence of the delivery and any other inpatient and outpatient services for the maternity care of the recipient.

From August 1, 2015 to July 31, 2020, Medicaid SMCPs totaled almost $4.7 billion.

Key Findings

We identified about $55 million in improper and questionable SMCPs to MCOs, as follows:

  • $29.1 million was paid without the required supporting encounter data;
  • $23.4 million was paid where the encounter 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 1 to 6 months.

In many instances, MCOs agreed their SMCP claims were inappropriately billed and, by the end of the audit fieldwork, had reversed about $1.8 million of the payments.

The Department’s eMedNY claims processing system does not have access to maternity encounter data to verify that SMCP claims are eligible for reimbursement. Instead, the Department relies on audits by the Office of the Medicaid Inspector General (OMIG) to identify and recoup inappropriate SMCPs. However, OMIG does not perform these audits in a timely manner, and its last such audit, with a scope period ended December 31, 2016, was not sufficiently inclusive to capture all improper SMCPs.

Key Recommendations

  • Review the remaining payments of approximately $53 million and make recoveries, as appropriate.
  • Monitor the accuracy of SMCP claims and take formal corrective actions with non-compliant MCOs.

Andrea Inman

State Government Accountability Contact Information:
Audit Director: Andrea Inman
Phone: (518) 474-3271; Email: [email protected]
Address: Office of the State Comptroller; Division of State Government Accountability; 110 State Street, 11th Floor; Albany, NY 12236