Audits: NY Overpaid Providers $11.4M for Medicaid

2:18 PM, Jul 10, 2013   |    comments
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By Jessica Bakeman,
Albany Bureau

ALBANY New York overpaid Medicaid providers $11.4 million, two audits by the state comptroller's office Tuesday found.

The state has recovered $3.8 million of the overpayments, which were largely the result of providers overstating reimbursement charges for the government health insurance program that serves mainly poor and disabled people, state Comptroller Thomas DiNapoli said.

"New York's Medicaid system continues to be rife with waste," DiNapoli said in a statement. "Year after year, my auditors identify the same types of Medicaid errors due to weak controls. (The state Department of Health) needs to greatly improve its supervision of the program to protect taxpayer dollars." 

The audits showed two main causes for the overpayments.

The first deals with Medicare coinsurance payments. Many New Yorkers who qualify for Medicaid are also recipients of Medicare, an insurance program for the elderly. Medicare is the primary payer for recipients who are eligible for both programs. After Medicare processes a claim, Medicaid pays the balance.

In 2009, the most recent available data year, the state Medicaid program overpaid more than 210,000 claims by more than $7 million, primarily because providers incorrectly reported the Medicare coinsurance charges, DiNapoli said. 

The state made the overpayments to 8,727 providers, of which 24 received overpayments of more than $41,000. Three providers each received overpayments of more than $114,000, with one receiving overpayments of more than $192,000.

DiNapoli's office recommended that the state Department of Health aggressively pursue recovering the overpaid funds. 

In a letter included in the audit, the health department responded that it was too late to recover those overpayments but stressed that preventative measures have been implemented to curb the abuse.

"After claim analysis, it was determined recovery on most of the claims, with dates of services in 2009, would have been time barred under the current Center for Medicaid and Medicare Services three year look back rules," the department wrote.

The department said it implemented an automated system called eMedNY on Dec. 3, 2009, which tracks Medicare and Medicaid payments for people who are eligible for both programs. The system improves accuracy of payments, it said. 

"Using this new automated crossover system, providers need to submit a claim for a dual eligible recipient only to Medicare," the department said. "Medicare will pay its portion of the claim and then automatically forward the claim's data to eMedNY to enable Medicaid to pay the coinsurance change."

Additionally, the same audit showed the providers were overpaid $238,842, because the state designated that they were eligible for enhanced federal payments when they were not.

The health department said it had corrected this error before the audit and would work to recover the overpayments.

DiNapoli's other audit showed overpayments resulting from the use of incorrect charges and other accuracy errors. Auditors identified $4.1 million in overpayments resulting from those mistakes during a six-month period that ended March 31, 2012. 

About $3.8 million of those overpayments have been recovered.

The health department wrote in a formal response to the audit that it would work to ensure the accuracy of rates and create a plan to reduce the potential of human error. It outlined a series of other steps it would take to prevent the overpayments, and department officials will attempt to recover the remainder of the overpayments.

DiNapoli has uncovered $1.6 billion in Medicaid waste, fraud and abuse in recent years, including $77.8 million in 2013, according to his office.

2 On Your Side spoke with the state comptroller's office Tuesday, and we are told it is now up to the Department of Health to get the money back. But in a letter included in the audit, the health department said it was too late to recover the some of the overpayments.

The comptroller's office says some of the overpayments are honest mistakes, someone typing something wrong into the computer, but many are people trying to rip off Medicaid.

One audit found one case where a provider reported a charge of $250 to Medicaid for a session of psychotherapy instead of the Medicare-approved amount of $102.

That's a difference of $148, more than twice the approved amount.

Hundreds of thousands of claims were overpaid by about 50-percent.

So why isn't the computer program catching these mistakes?

The comptroller's office tells us that is a huge challenge. There are weaknesses in the computer system used by the health department that need to be addressed.

The plan is to put in more controls for when a provider puts in a number that's clearly wrong. The system needs to red flag it.

Now, the Department of Health has 90 days to report back to the state government with a plan to stop the waste.


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