Department of Health
Office of Temporary and Disability Assistance

Fee-for-Service Claims Paid for Recipients Enrolled in Managed Care Plans

In Medicaid managed care programs, the medical services needed by program participants are arranged for by a single service provider, who receives a flat monthly fee for each program participant rather than a fee for each service provided. However, if a program participant needs services not provided by the managed care plan or if the participant chooses to obtain certain services outside of the plan, a fee-for-service claim may be paid on behalf of the participant. We examined the payment of such fee-for-service claims over a period of about three years and identified as much as $38.5 million in Medicaid overpayments. The overpayments were made because of delays by counties in updating Medicaid enrollment information for the managed care plans and because duplicate payments were made for certain medical services. While some of the potential overpayments cannot be recovered because of the nature of the contracts with the managed care providers (the contracts have been revised to permit such recoveries in the future), other potential overpayments can be recovered. We recommend that these potential overpayments be investigated and recovered, as appropriate.

For a complete copy of Report 96-S-83 click here.
For a copy of the 90-day response click here.