Department of Health
Medicaid Fee-for-Service Payments for Managed Care Recipients (Follow-Up Report)
The Department of Health uses two methods to pay Medicaid providers: the fee-for-service method and the managed care plan method. Under the fee-for-service method, a provider is paid for every Medicaid eligible service rendered to the recipient. Under the managed care plan method, a managed care plan receives a monthly payment for each Medicaid recipient enrolled in the plan and is responsible for ensuring that the enrollees have access to a comprehensive range of medical services. If a Medicaid recipient is enrolled in a managed care plan, most of the eligible medical services provided to the recipient should be covered by the monthly payment to the managed care plan and only in certain specified circumstances should fee-for-service payments be made on behalf of the recipient.
In audit 2007-S-100, we examined the fee-for-service payments made over a two-year period on behalf of recipients enrolled in three downstate managed care plans and found that about $3 million in fee-for-service payments should not have been made, because the services were covered by the monthly payments to the managed care plans. The inappropriate payments were made because of delays in updating the managed care enrollment information for the recipients, most of whom were newborns whose mothers were enrolled in the three managed care plans. We recommended that the inappropriate payments be recovered and steps be taken to reduce the delays in updating managed care enrollment information. When we followed up on this matter with Department of Health officials, we found that an additional $24 million in inappropriate payments had been identified because of actions taken in response to our audit and progress had been made in addressing the problems identified by our audit.
For a complete copy of Report 2009-F-36 click here.