New York State Made Unallowable Medicaid Fee-for-Service Payments for Beneficiaries Also Enrolled in Medicaid Managed Care

The New York State Department of Health (State agency) did not prevent separate Medicaid fee-for-service payments from being made for beneficiaries also enrolled in a Medicaid managed care organization. Specifically, for all 107 inpatient admissions included in our sample, the State agency improperly claimed Federal Medicaid fee-for-service reimbursement for inpatient hospital services on behalf of beneficiaries for whom separate Medicaid managed care payments were made under a different Medicaid identification number. These improper payments occurred because the State agency operated two eligibility systems that did not identify beneficiaries with multiple Medicaid identification numbers. In addition, local departments of social services did not use all available resources within the systems to ensure that beneficiaries were not issued multiple Medicaid identification numbers.

On the basis of our sample results, we estimated that the State agency improperly claimed at least $23.4 million in Federal Medicaid fee-for-service reimbursement for inpatient hospital services made on behalf of beneficiaries for whom separate Medicaid managed care payments were also made.

We recommended that the State agency (1) refund $23.4 million to the Federal Government and (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. The State agency partially agreed with our first recommendation (financial disallowance) and generally agreed with our second recommendation.