Purpose

To determine whether Medicaid made improper payments for free vaccines available through the Vaccines for Children Program. The audit covered the period January 1, 2012 to May 31, 2017.

Background

The Vaccines for Children Program (VFC Program) is a federally funded Medicaid benefit that provides free vaccines to eligible children younger than 19 years of age whose parents or guardians may not be able to afford them. The VFC Program helps ensure these children receive their recommended vaccines and are protected from a number of diseases. The Centers for Disease Control and Prevention (CDC) is responsible for implementation of the VFC Program. The CDC purchases vaccines from drug manufacturers at a discount and distributes the vaccines to state health departments and certain local and territorial public health agencies at no cost. These agencies then distribute the vaccines at no cost to physicians and public health clinics enrolled in the VFC Program. Because the federal government purchases the vaccines, providers are not reimbursed for the cost of the vaccines. Instead, they are paid a fee for administering the vaccines. For children enrolled in Medicaid, the Medicaid program pays the vaccine administration fee.

Key Findings

Auditors identified $32.7 million in improper Medicaid payments for costs related to administering VFC Program vaccines between January 1, 2012 and May 31, 2017. Medicaid payments were made for free vaccines, and payments of the fee to administer the vaccines were not always accurate. Specifically, the audit found:

• Managed care organizations (MCOs) made improper payments totaling $29.8 million to health care providers. The improper payments occurred because of control weaknesses in the MCOs’ claims processing systems.
• Medicaid made improper fee-for-service payments totaling $2.9 million to health care providers. The improper payments occurred because providers did not bill claims according to Medicaid policies and eMedNY lacked controls to prevent overpayments.

Key Recommendations

• Review the improper MCO and fee-for-service payments we identified and ensure proper recoveries are made.
• Formally instruct MCOs on the proper payment of administered VFC Program vaccines.
• Formally advise providers to report accurate claim information when billing Medicaid for administered VFC Program vaccines.
• Ensure claims processing controls prevent improper MCO and fee-for-service VFC Program payments.

Other Related Audits/Reports of Interest

Department of Health: Managed Care Premium Payments for Recipients With Comprehensive Third-Party Insurance (2016-S-60)

Department of Health: Maximizing Drug Rebates for Health and Recovery Plans (2017-S-61)