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December 5, 2012


DiNapoli: DOCCS Could Save Millions on Health Care

New York State could save as much as $20 million a year if the Department of Corrections and Community Supervision (DOCCS) applies to the federal Medicaid program for inpatient care for eligible inmates, according to an audit released today by State Comptroller Thomas P. DiNapoli.

“With state tax revenues lagging projections and the costs of Hurricane Sandy mounting, every state agency should be doing what it can to find additional revenue and cut costs,” DiNapoli said. “DOCCS should seek reimbursement from Medicaid and other outside insurance providers for any money to which the state may be entitled.”

Federal Medicaid rules allow states to bill Medicaid for inpatient services received by eligible inmates. Five states, including Louisiana, Mississippi, Nebraska, Oklahoma and Washington, already do so, according to a report by North Carolina's State Auditor. During the audit period covering March 31, 2008 to March 31, 2010, more than $89 million paid by DOCCS to outside health care providers was for inpatient services. Billing Medicaid for eligible inmate health care costs could significantly reduce the department’s costs for such care.

DiNapoli’s auditors also found that medical care providers were sometimes overpaid by DOCCS. Auditors found five providers were overpaid $84,100 in connection with 141 sampled claims where time billed for hourly clinics exceeded the hours worked. The overpayments ranged from $624 to $73,347. DOCCS subsequently reviewed all the claims for one provider going back to 2005 and identified another $50,769 in overcharges. DOCCS also identified two other providers who have overcharged the state.

A review of 45 claims totaling $711,829 for nine of the highest paid health care service providers found DOCCS paid two claims from two providers totaling $4,134 for procedures billed for twice.

The audit recommends DOCCS:

  • Seek reimbursement from Medicaid or other third party insurance for medical services from outside providers when appropriate;
  • Recover the overpayments identified;
  • Test samples of future payments to service providers to determine if recovery for overcharges is necessary;
  • Review claims to determine if procedure codes are being inappropriately separated resulting in overcharges;
  • Verify that the actual hours worked in connection with clinic services match the hours billed and paid for; and
  • Research ways to electronically capture all procedure codes and modifiers on paid claims for analysis of billing accuracy and appropriateness.

DOCCS agreed in part with the audit’s findings. For a copy of the full report, including DOCCS’s response, visit:

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