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NYS Comptroller


Taxpayers' Guide to State and Local Audits

Department of Health
Improper Payments Related to the Medicare Buy-In Program

Issued: October 26, 2012
Link to full audit report 2010-S-76

To determine if Medicaid properly paid Medicare premiums and medical claims for people in the Medicare buy-in program. The audit covered the period March 1, 2006 through February 28, 2011.

The federal government established the Medicare buy-in program to assist certain low-income people pay out-of-pocket Medicare expenses. Under the buy-in program, Medicaid pays the Medicare premiums and sometimes the deductibles and coinsurance of people who meet various eligibility requirements. Determinations of Medicare buy-in program eligibility are made by the New York City Human Resources Administration and the 57 other county departments of social services outside of New York City (local districts). Medicaid payments for the Medicare buy-in program total about $1 billion annually.

Key Findings

  • From March 2006 through February 2011, Medicaid made nearly 260,000 improper payments (totaling about $26.8 million) for people enrolled in the Medicare buy-in program.
  • The improper payments included 187,050 Medicare premiums (totaling about $21.1 million) for 16,219 people who were ineligible for the buy-in program. This included improper payments (totaling $1.9 million) for 532 people who were deceased. In one instance, Medicaid made payments totaling $10,700 for a person who had not lived in the United States for nearly two years.
  • The improper payments also included 71,355 medical claim reimbursements (totaling about $5.5 million) for people who were eligible for the buy-in program. In one instance, Medicaid overpaid a claim by $34,000 because the Medicaid claims processing system did not properly reflect buy-in program rules.
  • The improper payments resulted from insufficient Department of Health oversight, poor local district practices, and weaknesses in certain Medicaid claims processing controls. In recent years, Department actions have reduced the amount of improper buy-in program payments. However, weaknesses still exist in local district practices and in certain Medicaid claims processing controls, and improper payments likely continue to occur.

Key Recommendations

  • Increase oversight of local districts to help ensure they assess persons' buy-in program eligibility and end premium payments for ineligible people timely.
  • Recover inappropriate Medicare buy-in payments.
  • Develop and implement changes in the Medicaid claims processing system to ensure accurate payment of medical claims for individuals eligible for the buy-in program.

Other Related Audits/Reports of Interest
Department of Health: Medicaid Payments for Medicare Part A Beneficiaries (2009-S-36)

State Government Accountability Contact Information:
Audit Director: Brian Mason
Phone:(518) 474-3271; Email:
Address: Office of the State Comptroller; Division of State Government Accountability; 110 State Street, 11th Floor; Albany, NY 12236