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March 1, 2013

DiNapoli Audit Finds $26 Million In Medicaid Overpayments

The state Department of Health made $26 million in Medicaid overpayments and other questionable payments because of flaws in its eMedNY claims processing computer system, according to an audit released today by State Comptroller Thomas P. DiNapoli.

“Taxpayers should not be forced to foot a $26 million bill due to computer programs that are poorly designed and lack controls to prevent inappropriate payments,” said DiNapoli. “The Department of Health needs to do better in ensuring that taxpayer money for critical Medicaid services is not wasted. This money must be recovered and controls to avoid overpayments must be put in place.”

The audit looked at claims for patients who are both Medicare and Medicaid eligible, which are known as crossover claims. In December 2009, the Department of Health implemented a new payment mechanism in eMedNY to achieve greater control over Medicaid payments. The new mechanism is an attempt to ensure Medicaid does not pay crossover claims denied by Medicare, only pays the portion of the claim that it actually owes and crossover claims are billed first to Medicare before being billed to Medicaid.

DiNapoli’s auditors found that from implementation of the new system in 2009 through March 31, 2012, the system was not working correctly, allowing nearly 866,000 improper and questionable payments to be made. Auditors identified $6.9 million that eMedNY improperly paid for, including 137,000 crossover claims previously denied by Medicare. Auditors also identified $3.1 million for 277,000 crossover claims where the payment exceeded the amount that Medicaid owed. In addition, auditors found that more than 24,800 providers were able to bypass crossover system controls and bill approximately 452,000 claims directly to Medicaid instead of first billing Medicare. As a result, Medicaid made potential overpayments totaling $16.4 million.

Since December 3, 2009, Medicaid reimbursed a total of $1.1 billion for approximately 41.4 million crossover claims.

DiNapoli’s auditors recommended that the DOH:

  • Correct the eMedNY computer controls that caused the Medicaid overpayments identified during the audit;
  • Recover the Medicaid overpayments totaling $10 million caused by eMedNY computer programs that incorrectly processed Medicare crossover claims; and
  • Review the $16.4 million in potential Medicaid overpayments and recover where appropriate.

DOH officials generally agreed with the audit’s findings and have begun to implement the recommendations. For a copy of the report, including DOH’s response, visit:



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