Purpose

To determine the extent of implementation of the three recommendations included in our initial audit report, Excessive Medicaid Payments for Services to Recipients Receiving Medicare Benefits (Report 2009-S-64).

Background

Our initial audit report, which was issued on September 20, 2010, examined whether the Department was correctly paying claims for services to Medicaid recipients who also have health insurance through Medicare.  During the four year audit period ended June 30, 2009, we identified about $600 million in Medicaid payments that could have been avoided had the Department taken more comprehensive and proactive steps to administer Medicaid reimbursements for services provided to dual eligible individuals. About $500 million of this amount occurred because the Department did not ensure New York’s regulatory structure has kept pace with other states’ efforts to limit Medicaid payments in areas where Medicaid and Medicare programs overlap. The remaining $100 million in overpayments occurred because the Department did not require the eMedNY system to properly apply the 20 percent limitation on coinsurance charges in all cases where it was applicable; providers did not properly report Medicare coinsurance amounts on the claims they submitted; and providers’ claims incorrectly reported that Medicare had not made any payment toward the billed charges. We recommended the Department establish a more proactive culture that seeks to ensure that Medicaid is the payer of last resort for services provided to dual eligible individuals.  We also recommended the Department review the potential overpayments we identified and recover overpayments where appropriate. Furthermore, we recommended the Department routinely audit claims involving Medicaid payments for Medicare beneficiaries.

Key Finding

• Department and Office of the Medicaid Inspector General officials have made progress in correcting the problems we identified in the initial report.  All three prior audit recommendations have been partially implemented.

Key Recommendation

• Officials are given 30 days after the issuance of the follow-up review to provide information on any actions that are planned to address the unresolved issues discussed in this review.

Other Related Audit/Report of Interest

Department of Health: Excessive Medicaid Payments for Services to Recipients Receiving Medicare Benefits (2009-S-64)