Department of Health

Medicaid Overpayments Relating to Managed Care (Follow-Up Review)

If a Medicaid recipient is enrolled in a managed care organization (MCO), the MCO pays for the medical services provided to the recipient and Medicaid pays the MCO a fixed monthly capitation premium for each recipient enrolled in the MCO. If a Medicaid recipient is not enrolled in an MCO, Medicaid pays providers for the services provided to the recipient on a fee-for-service basis. In our prior audit report 2001-S-44, we examined certain payments made by Medicaid over a two-year period on behalf of recipients enrolled in MCOs and identified about $24.2 in overpayments. About $15.3 million of these overpayments were caused by delays in updating managed care enrollment information (this information is supposed to be updated by local social services districts), while $8.9 million related to certain fee-for-service payments that were covered by the recipientsí MCOs. We also identified other potential overpayments, as $5.2 million in certain fee-for-service payments appeared to overlap the managed care coverage provided by $7.1 million in capitation premiums. We recommended that all overpayments be recovered and other actions be taken to prevent, or expedite the recovery of, future overpayments. In our follow-up review, we found that little progress had been made by the Department of Health in recovering the overpayments or implementing the other recommendations contained in our prior report.

For a complete copy of Report 2004-F-16 click here.
For a copy of the 90-day response click here.