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NEWS from the Office of the New York State Comptroller
Contact: Press Office 518-474-4015

State Comptroller DiNapoli Releases Audits

January 15, 2016
Department of Health (DOH): Suspicious and Fraudulent Medicaid Payments to Affiliated Brooklyn Dentists (Follow-Up) (2015-F-24)

An initial audit issued in April 2013, identified about $2.3 million in highly suspicious and possibly fraudulent Medicaid claims that were submitted by the six affiliated dentists. The affiliated dentists created false entries in medical records to support claims, and that it was not possible to perform all of the procedures the dentists billed in relation to the hours their offices were open. In addition, the dentists paid staff to recruit Medicaid recipients to their offices. In a follow-up, auditors determined DOH made progress in addressing the problems identified in the initial audit report. At the time of the follow-up review, the state was paid $681,336 in restitution. Additionally, four dentists were removed from the Medicaid program and the remaining two dentists were prohibited from receiving Medicaid payments.

Department of Health: Medicaid Program: Overpayments of Ambulatory Patient Group (APG) Claims (Follow-Up) (2015-F-20)

An initial audit issued in August 2013, identified flaws in DOH’s eMedNY claims processing system that allowed improper APG payments on 6,615 claims totaling $1,204,186. Auditors also identified $933,399 in duplicate payments that were made to providers for the same services under both the old and the new (APG) payment methodologies. Furthermore, auditors identified 56,241 claims totaling $4,286,603 that were at risk of duplicate payment and needed to be reprocessed using the new APG methodology. In a follow-up, auditors found DOH has made significant progress in implementing the recommendations made in the initial audit, which included recovering nearly $898,000 in overpayments and implementing new claims processing controls to prevent future improper payments.

United HealthCare Insurance Company of New York: Empire Plan Drug Rebates (2014-S-62)

In accordance with its contract, United is required to negotiate agreements with drug manufacturers for rebates, discounts, and other considerations and pass 100 percent of the value of the agreements on to the prescription drug program. United subcontracted key functions of the prescription drug program to Medco Health Solutions, which was subsequently bought by Express Scripts Holding Company. Auditors found United did not credit the state $371,635 in rebates because manufacturer agreements utilized to obtain rebates for the Empire Plan’s prescription drug program did not meet or exceed Express Scripts’ best existing rebate agreements for other clients, as required. Express Scripts did not invoice, collect, or allocate $196,845 in rebates due to errors in the rebate process, and Express Scripts retained rebates of $141,804 despite its contractual requirement to remit those funds.

New York State Health Insurance Program: Empire BlueCross BlueShield: Selected Payments for Special Items for the Period January 1, 2012 Through June 30, 2012 (Follow-Up) (2015-F-21)

An initial audit issued in December 2013, found that Empire did not have adequate controls to ensure special items were paid according to contract provisions. As a result, from January 1, 2012 through June 30, 2012, Empire made a net overpayment of $391,894 on 81 claims for special items. In a follow-up, auditors found Empire made considerable progress in implementing the recommendations made in the initial audit report, which included recovering $368,917 in overpayments.

New York State Health Insurance Program: Empire BlueCross BlueShield: Selected Payments for Special Items for the Period July 1, 2012 Through December 31, 2012 (Follow-Up) (2015-F-22)

During the six-month period July 1, 2012 through December 31, 2012, Empire made a net overpayment of $898,541 on 96 claims from hospitals that had contracts with Empire that limited the amounts that should have been charged for special items. In a follow-up, auditors found Empire officials made considerable progress in implementing the recommendations made in our initial audit report, which included recovering $639,896 in overpayments.

Department of Health: Medicaid Overpayments for Inpatient Transfer Claims Among Merged or Consolidated Facilities (2014-S-18)

Medicaid made $1.6 million in actual overpayments and up to $5.3 million in potential overpayments because separate payments were made for recipients transferred among merged or consolidated facilities. Since the recipients were transferred between merged or consolidated facilities only one payment should have been made. DOH did not enforce their regulations regarding Medicaid reimbursements for hospital transfer claims among merged or consolidate facilities. Further, DOH lacks an automated mechanism to identify merged hospitals and, as a result, it cannot readily detect or prevent inappropriate payments for inpatient transfers among these facilities.