Purpose

To determine if the owner of a Medicaid eye care provider and the owner’s associates inappropriately enrolled as Medicaid recipients and to determine if the provider inappropriately billed Medicaid for vision services. This audit covered the period January 1, 2008 through September 30, 2013.

Background

The Department of Health (Department) administers the Medicaid program in New York State. Medicaid provides a wide range of medical services, including vision care, to individuals who are economically disadvantaged and/or have special health care needs. For the fiscal year ended March 31, 2014, New York’s Medicaid program had approximately 6.5 million enrollees and Medicaid claim costs for eye care services totaled about $10 million.

During the course of this audit, our fieldwork was temporarily suspended to avoid interfering with reviews conducted by other public oversight authorities of the matters addressed in this report.

Key Findings

We found numerous violations and questionable practices connected to the owner of a Medicaid eye care provider (Provider) and extending to the owner’s family, including:

• The owner and family members submitted false income information to secure Medicaid coverage and other medical assistance benefits. During the period of enrollment for the owner and the owner’s family, the State paid $68,483 in medical benefits on their behalf.
• The Provider received over $22,000 in improper Medicaid payments for claims with inappropriate coinsurance charges and/or for services not supported by medical records.
• The Provider allowed non-Medicaid-enrolled providers to render services, and on its claims to Medicaid identified a different, authorized, provider as the service renderer.
• The Provider used a non-Medicaid-enrolled billing service company to submit its claims. The owner of the Provider and the owner of the billing service company are married.
• The owner of the billing service company used other providers’ Medicaid identification numbers to gain unauthorized access to the eMedNY claims system and bill over $700,000 in Medicaid claims on behalf of 55 providers.

Further, we identified five additional Medicaid recipients who had a business or personal connection to a member of the Provider’s family and, we believe, submitted misleading information on their Medicaid applications to gain eligibility.

Also, recipients identified in this audit engaged in transactions that were not indicative of a person living at or below the income levels that qualify a person for Medicaid eligibility. For example, we identified over $400,000 in deposits made to the Provider’s family’s personal bank accounts (much of which appeared to be income). Additionally, in November 2012, the Provider’s owner and the owner’s spouse paid $105,000 toward the purchase of a condominium for one of their family members.

Key Recommendations

We made eight recommendations to the Department to: assess the eligibility of the identified Medicaid recipients, deactivate ineligible Medicaid recipients and providers, conduct an expanded review of improper Medicaid claims, recover improper State payments, and improve claims processing controls.

Other Related Audits/Reports of Interest

Department of Health: Medicaid Claims Processing Activity April 1, 2012 through September 30, 2012 (2012-S-24)
Department of Health: Overpayments of Certain Medicare Crossover Claims (2011-S-28)
Department of Health: Medicaid Claims Processing Activity April 1, 2009 through September 30, 2009 (2009-S-21)