Objective

To determine whether the Department of Health (Department) took sufficient steps to control the Medicaid costs of recipients who were eligible for Medicare based on age but were not enrolled in Medicare. The audit covered the period July 2016 through June 2021.

About the Program

The Department administers the State’s Medicaid program. Individuals who are eligible or appear eligible for Medicare are required to apply for Medicare as a condition of receiving Medicaid. When Medicaid recipients are also enrolled in Medicare, Medicare becomes the primary payer and Medicaid the secondary. As a secondary payer, rather than pay for the medical service itself, Medicaid can pay a recipient’s Medicare premiums, deductibles, and coinsurance amounts, which allows for a significant cost avoidance for the Medicaid program. Local Departments of Social Services (Local Districts) are required to identify Medicaid recipients who are at least 65 years of age, or will be turning age 65 within a 3-month time frame, and have them apply for Medicare. The Social Security Administration (SSA) determines Medicare eligibility and enrolls individuals. SSA also administers the Supplemental Security Income (SSI) program, a federal cash benefit to assist low-income individuals. In New York, all SSI recipients are eligible to receive Medicaid. When SSA receives an SSI application for someone who is 65 years of age, it also checks the individual’s Medicare eligibility and enrolls eligible individuals.

Key Findings

We determined the Department had not taken sufficient steps to effectively control the Medicaid costs of recipients who appear eligible for Medicare based on their age. Although the Department issued guidance to Local Districts regarding the requirement for Medicaid recipients reaching age 65 to apply for Medicare, we found the Department did not ensure Local Districts complied. Also, the Department does not require Local Districts to have Medicaid recipients with SSI apply for Medicare because, according to Department officials, SSA already performs Medicare eligibility checks. However, according to SSA officials, a recipient may not receive Medicare if, for example, the individual provides SSA insufficient information.

For the audit period, we identified 13,318 Medicaid recipients who appeared eligible for Medicare based on age but were not enrolled in Medicare. Medicaid could have potentially saved $294.4 million on behalf of these recipients for clinic, inpatient, and practitioner claims that could have been covered by Medicare as the primary payer had the recipients been enrolled in Medicare at the time they turned 65. Of the 13,318 recipients, 10,566 were not in receipt of SSI (representing $191.7 million of the potential savings). We sampled 181 of these recipients and determined that for 145 recipients (80%), Local Districts lacked evidence that these recipients applied for Medicare. Of the 13,318 recipients, the remaining 2,752 received SSI (representing $102.7 million of the potential savings), which the Department does not require Local Districts to take action on.

Key Recommendations

• Follow up with recipients who appeared eligible for Medicare and ensure they apply for Medicare, as appropriate.
• Work with Local Districts to develop and implement procedures to ensure all recipients are asked to apply for Medicare when they appear eligible.
• Evaluate the cost-benefit of developing and implementing processes to periodically identify recipients with SSI who appear eligible for Medicare and refer them to SSA for Medicare eligibility determinations.