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Office of the New York State Comptroller

Taxpayers' Guide to State and Local Audits

Department of Health
Overpayments for Services Also Covered by Medicare Part B


Issued: June 20, 2012
Link to full audit report 2010-S-50

Purpose
To determine if the Department of Health overpaid health care providers’ Medicaid claims for Medicare Part B deductibles and coinsurance.  The audit covers the year 2008.

Background
Medicaid and Medicare are public programs that provide medical services to specific groups of people. Medicaid is a social health program for certain individuals and families with low incomes and few resources. Each state establishes its own Medicaid eligibility standards and determines the type, amount, and rate of payment for medical services. Medicare is a federal health insurance program that helps pay for hospital (Part A) and medical (Part B) care for elderly and certain disabled Americans. For most Part B services, Medicare requires a deductible and/or coinsurance. Some people qualify for both Medicaid and Medicare and have their Medicare Part B deductibles and coinsurance paid by Medicaid. A Medicaid claim for Medicare deductibles or coinsurance is called a "crossover claim." Generally, the amount Medicaid will pay for a crossover claim is the Medicare-approved amount less the amount Medicare paid for the service. It is critical that health care providers report accurate Medicare information on their crossover claims – otherwise, overpayments can occur. Some providers hire service bureaus to prepare and submit their Medicaid claims for them. Medicaid rules require service bureaus to have systems in place that allow providers to review their claims for accuracy prior to billing Medicaid.

Key Findings

  • The Department’s eMedNY computer system did not have controls to detect improper crossover claims submitted by certain providers.  Nearly 259,000 Medicaid claims for Medicare Part B coinsurance were processed and paid incorrectly during 2008.  In each case, the health care providers reported inflated Medicare Part B coinsurance amounts to Medicaid, enriching their Medicaid reimbursements.  As a result, the Department overpaid these providers $8.5 million. 
  • Not all service bureaus had a system in place that would allow providers to review their Medicaid claims prior to billing them. One service bureau who prepared claims on behalf of several providers submitted 30,000 claims to Medicaid with improper Medicare Part B information.  This resulted in overpayments totaling $1.2 million.

Key Recommendations

  • Review and recover the Medicaid claim payments for the providers we identified who reported improper Medicare Part B payment information.
  • Make sure all service bureaus have adequate systems in place for providers to review their claims prior to submitting them to Medicaid.

Other Related Audits/Reports of Interest

Department of Health: Overpayments for Medicare Part B Beneficiaries Report 2008-S-63

Department of Health: Overpayments of Coinsurance Fees for Medicare Beneficiaries Report 2008-S-128


State Government Accountability Contact Information:
Audit Director: Brian Mason
Phone:(518) 474-3271; Email: StateGovernmentAccountability@osc.state.ny.us
Address: Office of the State Comptroller; Division of State Government Accountability; 110 State Street, 11th Floor; Albany, NY 12236