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Office of the New York State Comptroller

Taxpayers' Guide to State and Local Audits

Department of Health
Unnecessary Managed Care Payments for Medicaid Recipients with Medicare (Issued 4/18/12)


Purpose
To determine whether the Department of Health (Department) made premium payments to Medicaid managed care plans for Medicaid recipients who also had Medicare health insurance coverage.

Background
Medicaid recipients who also have Medicare coverage are referred to as "dual eligibles". Generally, as payer of last resort, Medicaid only pays a dual eligible recipient's coinsurance and deductible amounts. In accordance with Department policy, dual eligible recipient should not be enrolled in managed care plans as the premium payment for managed care normally exceed what Medicaid would have paid for a recipient's coinsurance and deductibles. The Department should ensure that duel eligible recipients are disenrolled from managed care plan to avoid payment of monthly premiums.

Key Findings

  • For the three years ended May 31, 2010, auditors identified about 271,000 unnecessary Medicaid managed care payments (totaling about $111 million) that were made on behalf of 45,000 Medicare recipients who were ineligible for Medicaid managed care programs.
  • Had Medicaid paid only the deductibles and coinsurance for the recipients in question, the net savings to Medicaid would have been about $36 million.
  • The unnecessary Medicaid managed care premiums occurred because of delays in posting recipients' Medicare Data to eMedNY (Medicaid's automated claims processing and payment system) and because recipients were not disenrolled timely from managed care plans once their Medicare data was posted to eMedNY.

Key Recommendations

  • Formally assess the quality and utility of the Medicare eligibility data currently obtained from CMS and determine why it is not sufficient to remove Medicare recipients from Medicaid managed care timely. Take actions to help improve data quality and/or develop alternate means to compensate for data deficiencies.
  • Actively monitor the efforts of the localities and the broker to remove Medicaid recipients from managed care programs when they become Medicare eligible. Develop a formal process, including analysis of pertinent eMedNY payment data, to determine if the efforts of the localities and the broker are sufficient.
  • Formally consider increasing Department efforts to remove dual eligible persons from managed care if the efforts of the localities and the broker are deficient.

Link to full audit report (2010-S-75)

Other Related Audits/Reports of Interest
Department of Health: Medicaid - Payments for Medicare Part A Beneficiaries Report 2009-S-36
Department of Health: Medicaid Payments for Dual Eligible Individuals Report 2009-S-64


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