Purpose

To determine if the Department of Health overpaid health care providers for Medicaid claims for Medicare Part B coinsurance. The audit covers the period January 1, 2009 through December 31, 2009.

Background

Medicare is a federal health program for the elderly and disabled. It consists of several parts. Medicare Part B helps pay for medical care provided in outpatient settings. Medicaid is a joint state and federal health program for certain individuals and families with low incomes. People who qualify for both Medicare and Medicaid are referred to as "dual eligibles." For dual eligible recipients, Medicare is generally the primary payer while Medicaid is the secondary payer. Usually, Medicare pays 80 percent of the charges for approved Part B services, and Medicaid pays the remaining balances (typically for coinsurance) for dual eligible beneficiaries. About 570,000 of New York's Medicaid recipients received Medicare Part B services totaling $740 million in 2009. These services were provided in outpatient settings such as doctors' offices, clinics, and health centers.

Some heath centers are federally qualified health centers (FQHCs). FQHCs are "safety net" organizations that receive enhanced reimbursements from Medicare and Medicaid because they provide health care to an underserved area or population.

Key Findings

• The Department overpaid providers more than $7.1 million for 210,000 claims billed to Medicaid with incorrect Medicare Part B payment information. Most of the overpayments were attributable to excessive charges for coinsurance.
• The Department overpaid Medicaid providers $238,842 because it incorrectly designated them as FQHCs which made them eligible for enhanced Medicaid reimbursements they were not entitled to.

Key Recommendations

• Review and recover the Medicaid overpayments (totaling about $7.1 million) for providers that improperly reported Part B coinsurance data.
• Review and recover the Medicaid overpayments (totaling $238,842) made to providers who were incorrectly designated as FQHCs.

Other Related Audits/Reports of Interest

Department of Health: Overpayments for Services Also Covered by Medicare Part B (2010-S-50)
Department of Health: Medicaid Overpayments of Coinsurance Fees for Medicare Beneficiaries (2008-S-128)