Department of Health

Managed Care Payments for Newborn Services

Many of New York’s Medicaid recipients are enrolled in managed care organizations (MCOs). If a recipient is enrolled in an MCO, the MCO pays for the medical services provided to the recipient, and Medicaid pays the MCO a fixed monthly capitation premium for each recipient enrolled in the MCO. In addition, when a baby is born to a recipient who is enrolled in an MCO, Medicaid makes a special one-time payment to reimburse the MCO for the cost of the newborn’s hospital stay. We audited the claims submitted to Medicaid by MCOs for these special one-time payments to determine whether the claims were adequately documented by the MCOs. We found that some of the claims were not adequately documented, and as a result, there was less assurance these claims were valid. We also found that, contrary to billing requirements, some MCOs billed Medicaid for one-time newborn services before they paid the hospitals providing the services. We recommended that certain improvements be made in relation to the claims submitted by MCOs for newborn services.

For a complete copy of Report 2003-S-7 click here.
For a copy of the 90-day response click here.