Department of Health

Multiple Medicaid Payments for Newborn Services

We examined the payments made by Medicaid for services provided to newborn babies. Generally, certain types of payments should be made if the newbornís mother is enrolled in a managed care organization (MCO) and other types of payments should be made if the mother is not enrolled in an MCO. However, we found that the motherís enrollment status was not always properly taken into account before Medicaid was billed, and the billing errors were not detected by Medicaid. As a result, duplicate payments were sometimes made for the same services. We identified as much as $27.3 million in such duplicate payments during our six-year audit period. We also found that, contrary to billing requirements, some MCOs billed Medicaid for reimbursement of special newborn services before they paid the hospitals that actually provided the services. We further determined that some of these MCOs then delayed paying the hospitals for as long as five years, or did not pay the hospitals at all. We recommended that all overpayments be recovered and actions be taken to prevent such overpayments in the future. We also recommended that Medicaid payments for newborn services be monitored more closely by the Department of Health.

For a complete copy of Report 2002-S-25 click here.
For a copy of the 90-day response click here.
For a copy of the associated follow-up report click here.