NYSDA Publications

OSC Issues Four Audits on Improper Payments By Medicaid

The Office of the New York State Comptroller (OSC) has issued four audit reports on improper payments by the New York State Medicaid program.  OSC found millions of dollars in improper payments for various reasons, including some that may never be recovered.  You can read the OSC notice of its four Medicaid audits, and can access the complete audits, below.

Department of Health – Medicaid Program Claims Processing Activity April 1, 2022 Through September 30, 2022 (2022-S-12)

During the 6-month period ended September 30, 2022, eMedNY processed over 224 million claims, resulting in payments to providers of nearly $38 billion.  OSC’s audit of Medicaid claims processing activity identified over $16.7 million in improper Medicaid payments for claims that were not processed in accordance with Medicaid requirements.  The audit also identified 11 providers in the Medicaid program who were charged with or found guilty of crimes that violated laws or regulations governing certain health care programs.  The Department of Health removed three of the providers from the Medicaid program and referred two to the New York State Office of the Attorney General’s Medicaid Fraud Control Unit; the remaining six providers were under the Office of the Medicaid Inspector General’s review.

Department of Health – Medicaid Program – Improper Payments of Medicare Buy-in Premiums for Ineligible Recipients (Follow-Up) (2022-F-37)

Medicaid pays premiums for individuals enrolled in the Medicare Buy-in Program.  A prior audit report, issued in November 2021, identified $31.7 million in improper premium payments made on behalf of individuals who were not eligible for the Buy-in Program, an additional $23.6 million in payments made on behalf of individuals with coverage that exceeded Medicaid’s 2-year premium liability, and $372,716 in premium payments made on behalf of 282 individuals who were deceased but not disenrolled.  The follow-up found that the Department of Health made some progress in addressing the problems identified; however, additional actions are needed.  Of the initial report’s five audit recommendations, two were implemented, two were partially implemented, and one was not yet implemented.

Department of Health – Medicaid Program – Improper Fee-for-Service Pharmacy Payments for Recipients With Third-Party Health Insurance (2021-S-20)

Where Medicaid recipients have other third-party health insurance (TPHI), such as Medicare or commercial health insurance, TPHI is the primary payer and Medicaid is the payer of last resort.  The Office of the Medicaid Inspector General (OMIG) contracts with Gainwell Technologies (Gainwell) to identify claims where Medicaid was incorrectly identified as the primary payer and to recover payments.  Auditors found that the Department of Health and OMIG did not ensure that Gainwell properly identified and recovered all Medicaid payments for fee-for-service pharmacy claims where TPHI was liable instead, identifying more $37.4 million in improper Medicaid payments that had not been pursued for recovery.  Much of this amount may be unrecoverable due to New York State’s 3-year statute of limitations.

Department of Health – Medicaid Program – Excessive Payments for Durable Medical Equipment Rentals (2021-S-36)

Medicaid recipients receive necessary durable medical equipment (DME) – wheelchairs, for example – as a benefit of the program.  Some DME items are available on a monthly rental basis, subject to caps; when the cap is reached, the item is generally considered purchased and no additional rental payments are made.  However, certain other DME, such as oxygen equipment, is available for continuous (i.e., uncapped) rental only.  Auditors identified Medicaid overpayments totaling nearly $1.5 million for DME rentals that exceeded established monthly caps.  In addition, noting that Medicare imposes a 36-month cap on oxygen equipment rental payments, auditors determined that Medicaid could achieve significant cost savings – including an estimated $8.6 million for the audit scope – if the Department of Health adopted a similar policy rather than allowing continuous uncapped rentals of DME.