Health Reform WK-EDGE Audit reveals New York incorrectly claimed Medicaid reimbursements
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Thursday, September 5, 2019

Audit reveals New York incorrectly claimed Medicaid reimbursements

By Donielle Tigay Stutland, J.D.

OIG finds that New York claimed enhanced federal Medicaid reimbursements of $116.9 million during a six month audit period.

The OIG found New York incorrectly claimed enhanced Medicaid reimbursement of $116.9 million on behalf of 184,590 Medicaid beneficiaries enrolled in the new adult group during the period of October 1, 2014 to March 31, 2015. With the adoption of the Affordable Care Act in 2010, states were given the option to expand Medicaid coverage to cover non-disabled, low-income adults without dependent children, referred to in the report as the "new adult group." The audit reviewed almost 1.4 million beneficiaries enrolled in the new adult group; for whom New York received enhanced Federal Medicaid reimbursement of $3.2 billion (Federal share) for services paid during the period examined (OIG Report, A-02-15-01023, August 20, 2019).

To be eligible for Medicaid under the new adult group, individuals must meet state residency requirements, and the following criteria:

  • be between ages 19 and 64;
  • not be pregnant;
  • not be eligible for or enrolled in Medicare;
  • not be otherwise eligible for a mandatory Medicaid eligibility group;
  • have income that does not exceed 133 percent of the FPL; and
  • not be living with a dependent, uninsured child.

This new expansion of Medicaid coverage established enhanced Federal reimbursement rates, also known as the Federal Medical Assistance Percentage, or FMAP, for services provided to this new adult group. The OIG report indicated that the higher FMAP rates have been raising concerns about states improperly enrolling individuals in the new adult group, thus receiving improper payments.

OIG took a random sample of 130 of these beneficiaries to determine whether New York properly enrolled them in the new adult group and found that New York incorrectly claimed enhanced reimbursement for 18 beneficiaries and did not provide sufficient documentation for two beneficiaries.

Findings. The OIG report concluded that the New York State agency incorrectly claimed an enhanced FMAP rate for Medicaid services provided to some Medicaid beneficiaries enrolled in its new adult group. Using the sample of 130 beneficiaries, the OIG found that the state agency correctly claimed enhanced Medicaid reimbursement for 111 beneficiaries. However, for the remaining 19 beneficiaries, the state agency incorrectly claimed enhanced reimbursement for 18 beneficiaries and did not provide sufficient supporting documentation to verify that 2 beneficiaries were eligible for enhanced Medicaid reimbursement.

The New York State agency claimed enhanced Medicaid reimbursement for these beneficiaries as a result of human or system errors, including local and district staff improperly applying the rules, or failing to consider all of the relevant information. The report determined that the state agency staff did not always comply with the New York CMS approved verification plan for verifying Medicaid eligibility.

Finally, the report noted that the state agency did not always maintain documentation to support its determinations that beneficiaries were eligible for enhanced Medicaid reimbursement. The OIG estimated, based on its sample estimated that the state agency incorrectly claimed enhanced Federal Medicaid reimbursement of $116.9 million on behalf of 184,000 Medicaid beneficiaries enrolled in the new adult group during our 6-month audit period.

Recommendations. The OIG report recommends that New York:

  1. redetermine, as appropriate, the current Medicaid coverage group of the sampled beneficiaries for whom services were incorrectly reimbursed at an enhanced FMAP rate;
  2. ensure that it claims Medicaid reimbursement at the correct FMAP rate by taking the necessary steps to ensure that its staff considers all relevant documentation and Federal and State requirements during the enrollment process, which could have reduced or eliminated an estimated $116.9 million in overpayments caused by eligibility errors over the 6-month audit period; and
  3. maintain the necessary documentation to determine whether it enrolled individuals who did not meet Federal and State Medicaid eligibility requirements in the new adult group.

Comments. The New York State Department of Health disagreed with the findings in the OIG report. In particular, it provided additional information regarding four specific beneficiaries for whom it disputed the OIG’s eligibility assessment. OIG took that information into consideration, and revised its findings, however, OIG maintains its findings and recommendations are valid. The New York agency did describe steps that it has taken since the audit to ensure that local and district staff are following proper Medicaid enrollment policies and submitting reimbursements at the correct FMAP rates.

ReportsLetters: OIGReports AgencyNews MedicaidNews

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