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February 14, 2013


DiNapoli: Medicaid System Flaws Led to $7.8 Million in Overpayments

DiNapoliís Auditors Recouped Most of the Overpayments

The Department of Health’s (DOH) Medicaid program overpaid health care providers by $7.8 million over a six month period because of flaws with its eMedNY computer system, according to a report released today by New York State Comptroller Thomas P. DiNapoli. Auditors from the Comptroller’s Office recouped about $7.5 million of the overpayments and took steps to prevent future payment errors.

Auditors also found 21 medical providers that remained in the Medicaid program although they had been charged with or found guilty of crimes that violate Medicaid program laws or regulations. DOH terminated 20 of these providers. The status of the remaining provider was still under review.

“As we’ve seen in previous audits, improvements are sorely needed in the eMedNY system,” DiNapoli said. “DOH could have prevented most of the overpayments with better controls. DOH needs to make sure these overpayments don’t continue. Millions of dollars are being wasted.”

DOH administers the state’s $54 billion Medicaid program. Its eMedNY computer system processes Medicaid claims submitted by providers for services rendered and generates payments to reimburse the providers for their claims. During the six-month period ended September 30, 2011, eMedNY processed approximately 178 million claims totaling $25 billion.

DiNapoli’s auditors found that about $6.4 million of the overpayments were attributable to 14 claims which had excessive amounts for coinsurance, copayments, or deductibles from other plans. Most of this was attributable to one overcharge of $6,171,957 wherein a provider inadvertently posted a date into the field designated for the amount of a copayment. After DiNapoli’s auditors identified the errors, the providers adjusted all 14 claims.

The audit uncovered:

  • Duplicate claims for the same procedures. One clinic billed for anesthesia services five times on a single claim. When informed of this by auditors, the provider identified 71 other similar claims that were incorrect. The overpayments for the 72 claims totaled $236,738;
  • Inpatient claims billed with incorrect patient status codes. Auditors identified overpayments totaling $161,521 on two inpatient hospital claims because the hospitals billed a more costly level of care than what was actually provided;
  • Claims for a recipient who did not live in New York. Auditors identified recurring claims totaling nearly $20,000 over 3 1/2 years from out-of-state providers for an illegible recipient who lived in Pennsylvania and was enrolled in Pennsylvania’s Medicaid program; and
  • Improper claims for certain clinic services, physician-administered drugs, and vision care.

DiNapoli’s auditors made 20 recommendations to improve the eMedNY system, most of which have or are being implemented by DOH. The recommendations include:

  • Review and recover overpayments;
  • Formally assess changing the eMedNY edit that tests billing amounts to amend or deny claims that are unreasonable;
  • Develop solutions to properly process payments when primary insurer information on a claim does not match related eMedNY data;
  • Implement a system change to correct eMedNY processing of claims submitted with an incorrect Medicare insurance designation; and
  • Instruct providers how to correctly bill claims and monitor for compliance.

For a copy of the report, see:

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