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Medicaid billing errors over several years cost state $1.5 billion

State Comptroller Thomas P. DiNapoli announced that errors in billing may have exposed patients to unqualified and uncredentialed health care providers.
Credit: AP
AP PHOTO - A spokeswoman for Comptroller Thomas DiNapoli says normal oversight of the Tesla deal with the state was bypassed.

NEW YORK STATE, USA — Errors in the state Department of Health (DOH) billing system cost the state more than $1.5 billion in improper Medicaid payments over severals years and exposed patients to underqualified health care providers, according to three reports released Tuesday by State Comptroller Thomas P. DiNapoli. 

“Troubling errors like the ones routinely identified by my auditors are extremely costly. They can also put patients at risk,” DiNapoli said. “By not fixing problems with the Department of Health’s eMedNY system and other issues, hundreds of millions of dollars more in taxpayer dollars could be misspent and unqualified providers could continue to treat Medicaid patients.”  

The first report states auditors found that a significant number of claims were paid even though they did not include a proper National Provider Identifier (NPI). Providers are required to enroll as a participating provider of Medicaid and the provider's NPI is used to verify that a provider is enrolled and this screening is used to ensure quality of healthcare. 

The report states that a processing weakness in eMedNY and the Medicaid claims processing and payment system resulted in payments being made on clinic and professional claims without an appropriate NPI. Some claims paid included NPIs of providers who were not enrolled in Medicaid and others did not contain an NPI at all. 

A total of $76.7 million was paid to pharmacies that either did not have an appropriate NPI, or should not have been included on Medicaid claims or should be reviewed by DOH because of past misconduct. 

A second report found that from Jan. 1, 2015 through Dec. 31, 2019 that $28.5 million in claims were paid for what could be wrong reported claims on patient transfers. The claims in question involve a patient being reported as discharged only to be admitted to a different hospital 24 hours later, which indicates that these claims have a high risk of overpayment. 

The auditors sampled 31 claims and found that 15 of them were incorrectly coded as a discharge, which resulted in a total of $252,107 in overpayments in the sample. 

The audit found DOH has no process to identify or recover improper payments.

Auditors recommend DOH review claims to look for appropriate NPIs, enhance system controls to prevent improper payments on claims not containing proper NPIs, develop a process to identify and recover Medicaid overpayments on claims with high risk of incorrect patient status, and for DOH to review and recover payments from the 2,048 high-risk claims the report identified. 

A third report stated that DOH has recovered close to half of $102.1 million in improper managed care premium payments for 65,961 recipients who had multiple identification numbers in the eMedNY system found in a 2019 report.

Since the 2019 report, an additional $14.3 million in managed care premium payments for potentially inappropriate identification numbers between July 1, 2018 and Aug. 31 2020. Department officials report many of these cases have been resolved or are currently being reviewed.