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NYS Comptroller

THOMAS P. DiNAPOLI

Taxpayers' Guide to State and Local Audits

Department of Health
Medicaid Program: Medicaid Claims Processing Activity April 1, 2014 Through
September 30, 2014


Issued: June 29, 2015
Link to full audit report 2014-S-15
Link to 90-day response

Purpose
To determine whether the Department of Health’s eMedNY system reasonably ensured that Medicaid claims were submitted by approved providers, were processed in accordance with Medicaid requirements, and resulted in correct payments to the providers. The audit covered the period April 1, 2014 through September 30, 2014.

Background
The Department of Health (Department) administers the State’s Medicaid program. The Department’s eMedNY computer system processes Medicaid claims submitted by providers for services rendered to Medicaid-eligible recipients, and it generates payments to reimburse the providers for their claims. During the six-month period ended September 30, 2014, eMedNY processed about 164 million claims, resulting in payments to providers of about $25 billion. The claims are processed and paid in weekly cycles, which averaged about 6.3 million claims and $946 million in payments to providers.

Key Findings

Auditors identified about $33 million in actual and potential Medicaid overpayments. Auditors also identified claim processing control weaknesses that led to many of the problematic payments. Department officials took prompt actions to correct certain controls, including one which officials estimate will result in an annual savings to the Medicaid program of $2.4 million. The audit found:

  • $31.4 million in potential overpayments for clinic claims that were processed using an incorrect pricing methodology;
  • $402,927 in overpayments for claims billed with incorrect information pertaining to other health insurance coverage that recipients had. Further, certain improvements to eMedNY processing of claims involving Medicare Part A information will result in an additional annual savings of about $2.4 million;
  • $555,103 in improper payments for pharmacy claims that were not in compliance with State Medicaid policies;
  • $252,022 in overpayments for inpatient claims that were billed at a higher level of care than what was actually provided, were submitted with an inaccurate newborn birth weight, or contained an incorrect procedure code; and
  • Claims with improper payments for HIV tests, duplicate billings, and clinic, practitioner, and health home services.

By the end of the audit fieldwork, about $32.1 million of the improper payments were avoided or recovered. Auditors also identified providers in the Medicaid program who were charged with or found guilty of crimes that violate health care programs’ laws or regulations. The Department terminated eight of the providers we identified, but the status of six other providers was still under review at the time our fieldwork was completed.

Key Recommendations

  • We made 14 recommendations to the Department to recover the remaining inappropriate Medicaid payments and improve claim processing controls.

Other Related Audits/Reports of Interest

Department of Health: Medicaid Claims Processing Activity October 1, 2012 Through March 31, 2013 (2012-S-131)
Department of Health: Medicaid Claims Processing Activity April 1, 2013 Through September 30, 2013 (2013-S-12)


State Government Accountability Contact Information:
Audit Director: Andrea Inman
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