Purpose

To determine whether the Department of Health (Department) made improper Medicaid payments for transportation services. The audit covered the period January 1, 2013 through December 31, 2016.

Background

Federal regulations require the State Medicaid program to provide transportation to medically necessary services for those recipients who are unable to obtain transportation on their own. In January 2011, the New York State Governor’s Office established the Medicaid Redesign Team to reduce Medicaid costs and improve the delivery of health care services. As part of this initiative, in January 2012, the Department began the process of removing non-emergency transportation services from the mainstream Medicaid managed care benefit package and transferring these services to the Medicaid fee-for-service program (in which Medicaid reimburses providers directly for services rendered). In addition, this initiative transferred the responsibility of managing transportation services from local social services districts to the Department, which contracted with private transportation managers to manage such services and evaluate requests for prior authorization of non-emergency transportation services. As of December 2015, all non-emergency transportation services that were previously covered by mainstream managed care were covered under fee-for-service and all prior authorization requests for these services were handled by two transportation managers. From January 1, 2013 to December 31, 2016, the two transportation managers were reimbursed nearly $180 million for transportation management services, and Medicaid fee-for-service payments to transportation providers for non-emergency transportation services totaled approximately $1.6 billion.

Key Findings

• The Department reimburses transportation managers monthly based on the number of Medicaid recipients who are eligible for non-emergency fee-for-service transportation services. We identified flaws in the Department’s methodology for determining the number of monthly Medicaid recipients. We determined that recipients from nine Medicaid coverage groups were incorrectly included in the Department’s monthly calculations because the coverage groups do not actually cover Medicaid non-emergency transportation services. The inclusion of these coverage groups resulted in an over-reporting by the Department of 8.3 million recipients cumulatively between January 2013 and December 2016. This resulted in overpayments to the transportation managers of over $6.2 million. In response to our audit, the Department promptly implemented corrective actions in January 2017 to exclude these coverage groups from the monthly recipient counts. We estimated this will save the Medicaid program $7.6 million over the next five years.

• We identified two taxi companies that did not maintain the required documentation to support their transportation claims. One taxi company did not maintain the proper records for any trips prior to 2016, which accounted for $2.4 million in Medicaid payments. The other taxi company admitted it overbilled Medicaid for tolls after we requested records supporting the tolls. As a result of our audit, the taxi company self-reported the matter to the Office of the Medicaid Inspector General for corrective action. During our audit period, the provider billed Medicaid $169,893 for tolls.

• We also determined that four Advanced Life Support First Responder (ALSFR) providers were inappropriately enrolled in Medicaid, and received a total of $162,401 in inappropriate payments.

Key Recommendations

• Recover the $6.2 million in contract overpayments to the transportation managers for the period January 2013 to December 2016 and ensure that the nine Medicaid coverage groups are excluded from the monthly recipient counts that are used to pay transportation managers.

• Review the Medicaid payments made to the two taxi providers and recover any improper payments as warranted.

• Take the necessary corrective steps regarding the four ALSFR providers’ future participation in the Medicaid program, and take steps to ensure that ALSFR companies are not enrolled as Medicaid providers.

Other Related Audits/Reports of Interest

Department of Health: Medicaid Claims Processing Activity October 1, 2015 Through March 31, 2016 (2015-S-74)
Department of Health: Program Oversight and Monitoring of the Maximus Contract for the New York State of Health (Insurance Marketplace) Customer Service Center (2015-S-80)