Department of Health

Electronic Transfer of Medicaid Payments

New York State’s Medicaid program is administered by the Department of Health. Medicaid claims are processed and paid by an automated system that is operated by a contractor. Beginning in December 2005, medical service providers were given the option of having their Medicaid payments deposited directly into their bank accounts through an electronic funds transfer (EFT) process. We examined the controls over this process and found that a number of improvements were needed. Our audit was prompted by three EFT payments that duplicated previously processed manual payments (the duplicate payments were recovered). Generally, we found that established control procedures were not being followed by the contractor operating the Medicaid claims processing system and the Department was not adequately monitoring the contractor’s compliance with these procedures. We recommended certain improvements on the part of both the contractor and the Department.

For a complete copy of Report 2006-S-70 click here.
For a copy of the 90-day response click here.
For a copy of the associated follow-up report click here.