Department of Social Services

Impact of Third-Party Insurance Coverage on Medicaid Payments

Medicaid may be used to pay for medical services only when the patients treated have no other health insurance coverage. We examined the procedures used by the Department to ensure that Medicaid payments are not made on behalf of patients with private insurance coverage. In 1993, these procedures were used to prevent payments totaling $101 million. However, we found that the procedures could be improved. Our examination of selected Medicaid payments over a four-year period found that hospitals may have been overpaid as much as $43.4 million because they did not bill available private insurers or did not accurately report the revenue received from these insurers. We recommended that the Department recover the overpayments and improve its procedures to prevent such overpayments in the future. 94-S-72