Health Reform WK-EDGE New York making over $520M in Medicaid eligibility errors
Thursday, August 8, 2019

New York making over $520M in Medicaid eligibility errors

By Robert B. Barnett Jr., J.D.

The errors are resulting in hundreds of millions of dollars in payments to ineligible beneficiaries.

The state of New York failed to correctly determine Medicaid eligibility for some non-newly eligible beneficiaries, according to an HHS Office of Inspector General report. As a result of the errors, the report estimates that New York made Medicaid payments of $520.3 million to ineligible beneficiaries (and perhaps far more) during the six-month audit period. The report focused on "non-newly eligible beneficiaries," who are defined as those who remained eligible under traditional Medicare coverage after passage of the Affordable Care Act, which changed some eligibility rules (OIG Report, No. A-02-16-01005, July 2019).

Background. As part of the OIG’s ongoing series of reviews of the states’ Medicaid eligibility determinations, the OIG sought to learn whether the states were determining eligibility for non-newly eligible beneficiaries in accordance with federal and state eligibility requirements. It chose New York because the state has large numbers of non-newly eligible beneficiaries. The survey chose a random sample of 130 beneficiaries out of the state’s 5,351,560 non-newly eligible beneficiaries.

Eligibility determinations. The report found that New York correctly determined eligibility for 110 of the 130 beneficiaries. It also found that New York incorrectly determined Medicare eligibility for 6 of the beneficiaries. The report was not able to determine eligibility for the remaining 14 beneficiaries because New York failed to supply supporting documentation. While the number of ineligible beneficiaries may sound small, the implications are large because New York has so many non-newly eligible beneficiaries. In fact, the report extrapolated the numbers to conclude that New York paid $520.3 on behalf of 383,893 ineligible beneficiaries for the six-month period. Factor in those for whom the supporting documentation was lacking, and the numbers grow to $1.3 billion improperly paid to 618,057 potentially ineligible beneficiaries during the six-month audit period.

Causes. Human and system errors were blamed. State agency staff, for example, failed to consider all available information or else they failed to comply with New York’s state plan or its CMS-approved verification plan. Furthermore, the state agency’s enrollment system did not always query all electronic data sources to ensure that individuals were reporting all income sources when applying for Medicaid. And, finally, the state agency failed to maintain supporting documentation for eligibility determinations.

For three of the six who were inaccurately determined to be eligible for Medicaid benefits, the state agency incorrectly determined that they were eligible for the new adult group even though information in their files indicated that their household income exceeded 138 percent of the federal poverty level. For two of the six, the state agency incorrectly determined the individuals to be eligible under the medically needy category even though information in their files indicated that they had sufficient income or resources that exceeded the state agency’s limits for that group. For the sixth and final beneficiary, the state agency incorrectly determined that the individual was eligible for full Medicaid benefits even though the individual had not been in the U.S. for five years. In other words, she arrived in the U.S in 2012, applied for benefits in 2014, and should have been ineligible for full benefits because she had not been in the U.S. for the required five years.

Documentation deficiencies. For the 14 beneficiaries who lacked sufficient information, seven of them lacked documentation verifying their resources and another six lacked documentation that the state agency had verified the income, as required. For the final one, income verification in the file was incompatible with other data sources on the individual’s income.

Recommendations. The OIG recommended that the state agency (1) determine the current Medicaid eligibility of the beneficiaries who were sampled, (2) take steps to ensure that staff consider all available information when determining eligibility, and (3) maintain proper documentation.

Response. The state agency disagreed with the findings on the six beneficiaries who were deemed ineligible, and it offered additional information to support its decisions. After reviewing that information, the OIG stood by its original findings.

ReportsLetters: OIGReports AccessNews AgencyNews MedicaidNews

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