Department of Social Services

Medicaid Payments for Medicare Part B Services

Medicare is a federal health insurance program for the aged and the disabled, while Medicaid is a joint state and federal health insurance program for the needy. If an individual is eligible for both Medicare and Medicaid, the costs covered by insurance are paid by Medicare, except for a portion of the costs relating to certain services (called Part B services), which are paid by Medicaid through Medicare crossover claims. We examined the Medicare crossover claims paid by the Department of Social Services for services provided by hospital-based clinics and freestanding clinics. We found that, because of federal payment guidelines, hospital-based clinics are paid significantly more for the same services than freestanding clinics. We estimated that, over a two-year period, these additional payments cost New York's Medicaid program about $27 million. We recommend that officials from the Department of Social Services try to change the federal payment guidelines. We also examined the procedures used by the Department to process Medicare crossover claims and found that, because of weaknesses in these procedures, inappropriate payments were made. For example, because a misplaced decimal point on a claim form was not detected, a hospital-based clinic was overpaid $7.5 million. We recommend that the Department establish certain processing controls and recover the overpayments identified.

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