Department of Health
Department of Social Services

Controls Over Certain Medicaid Payments to Managed Care Providers

In Medicaid managed care programs, the medical services needed by program participants are arranged for by a single service provider, who receives a flat monthly fee for each program participant rather than a fee for each service provided. We examined the monthly Medicaid fees paid to managed care providers for program participants under the age of one. Such fees are relatively high because of the costs associated with birth. We identified as much as $19.5 million in overpayments over a six-year period; most of these overpayments related to infants who were no longer under the age of one. After we informed Department of Health officials of our findings, changes were initiated that should prevent such overpayments in the future. However, we recommend that officials investigate the erroneous claims submitted by certain managed care providers, because the claimed infants either had yet to be born or their dates of birth had been changed to make them appear younger.

We also found that the monthly Medicaid fees paid to managed care providers sometimes duplicated health insurance coverage provided elsewhere. In some instances, the simultaneous coverage was provided by the same health insurer, who was paid twice for serving the same patient. We recommend actions be taken to prevent such duplication and to recover certain duplicate payments.

For a complete copy of Report 96-S-67 click here.
For a copy of the associated follow-up report click here.
For a copy of the 90-day response click here.