New York Improperly Claimed Federal Medicaid Reimbursement for the Drug Herceptin Over a 3-Year Period

From July 2011 through June 2014, the New York Department of Health (State agency) improperly claimed approximately $300,000 in incorrect Federal Medicaid reimbursement for the drug Herceptin.

The incorrect payments occurred because the State agency did not adequately monitor providers to ensure they complied with Federal and State requirements. Specifically, the State agency (1) did not have sufficient billing system edits in place to prevent or detect incorrect payments, and (2) did not verify the acquisition cost for claims filed electronically; therefore, it paid providers based on submitted amounts only. Providers attributed the incorrect billings to clerical errors, provider billing systems, and inability to locate documentation.

We recommended that the State agency refund approximately $300,000 to the Federal Government. We also made procedural recommendations.