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Audit (A-02-11-01006)

New York State Made Unallowable Medicaid Managed Care Payments for Beneficiaries Assigned Multiple Medicaid Identification Numbers

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The New York State Department of Health (Health Department) did not always claim Federal Medicaid reimbursement for managed care payments in compliance with Federal requirements. Federal law authorizes payments to States for eligible Medicaid beneficiaries enrolled in a Medicaid managed care organizations (MCO) and prohibits payments to MCOs for beneficiaries whose Medicaid eligibility has not been properly determined.

On the basis of our sample results, we estimated that the Health Department improperly claimed at least $7.3 million in Federal Medicaid reimbursement for managed care payments that did not comply with Federal requirements. In addition, we estimated that the Health Department claimed $546,000 in Federal Medicaid reimbursement for managed care payments where applicants did not provide a valid Social Security number (SSN) or there was no case file documentation to support the eligibility determination.

Of the 150 beneficiary matches in our random sample, the Health Department complied with Federal requirements for 43 but not for the remaining 107. These deficiencies occurred because the Health Department operated two eligibility systems that did not identify potential beneficiary matches between the systems. In addition, local departments of social services did not (1) use all available resources within the systems to ensure that beneficiaries were not issued multiple Medicaid identification numbers, (2) ensure that applicants provided valid SSNs when required, and (3) maintain documentation to support eligibility determinations.

We recommended that the Health Department (1) refund $7.3 million to the Federal Government; (2) use all available resources to ensure that no beneficiary is issued multiple Medicaid identification numbers or develop one eligibility system that could be used to determine whether applicants are enrolled in any medical or public assistance program throughout New York State; and (3) ensure that it complies with certain Federal requirements by requiring local departments of social services to ensure that applicants provide valid SSNs when required and to maintain documentation to support eligibility determinations, which could have resulted in additional savings of $546,000 to the Medicaid program. The Health Department partially concurred with our first recommendation and generally concurred with our second and third recommendations.

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