ALBANY — Medicaid managed-care organizations made as much as $1.5 billion in “improper and questionable” payments to health-care providers who did not appear to be enrolled in Medicaid, according to an audit that New York State Comptroller Thomas P. DiNapoli released on June 4. Generally, under federal and state law, providers are “supposed to be […]
ALBANY — Medicaid managed-care organizations made as much as $1.5 billion in “improper and questionable” payments to health-care providers who did not appear to be enrolled in Medicaid, according to an audit that New York State Comptroller Thomas P. DiNapoli released on June 4.
Generally, under federal and state law, providers are “supposed to be enrolled,” a process that gives the New York State Department of Health (DOH) assurance that they are “equipped and eligible” to deliver services.
“The deadline for managed care organizations and their providers to comply with enrollment requirements was over five years ago, yet our audit shows payments to providers that are still not enrolled in Medicaid or have been denied,” DiNapoli said in the announcement. “Medicaid is vital to millions of New Yorkers in need of quality health care and the Department of Health must do a better job ensuring the program’s integrity.”
Background
DOH pays for Medicaid in two ways — fee-for-service and managed care. Under fee-for-service, DOH pays Medicaid-enrolled providers directly for health-care services. Under managed care, DOH pays monthly premiums to managed-care organizations (MCOs) for each enrolled Medicaid recipient and in exchange MCOs arrange for services with providers.
Under the federal 21st Century Cures Act, in-network managed-care providers were required to be enrolled in Medicaid by Jan. 1, 2018. Enrollment informs DOH that the providers are licensed, credentialed, and able to provide Medicaid services. MCOs are supposed to terminate providers from their networks who do not enroll in the state’s Medicaid program, DiNapoli’s office said.
After services are provided and paid by MCOs, they then submit claims that report the services to DOH. Auditors reviewed claims from January 2018 through June 2022 and found $1.5 billion in “improper and questionable” claims.
Claims
Five MCOs paid $916 million in claims for services by in-network providers whose IDs did not match with a Medicaid-enrolled provider on the date of service.
In addition, $832.5 million in claims were for services by providers whose Medicaid application was denied or had been withdrawn by DOH either because they failed to meet Medicaid program standards or were automatically withdrawn because the application was missing information.
For example, one pharmacy was denied enrollment by OMIG (Office of the Medicaid Inspector General) due to unclean conditions, lack of proper supporting documentation, and expired medications on pharmacy shelves. Yet, it received more than $57 million in MCO payments ($212 million of the $832.5 million was included in the $916 million referenced above.)
Furthermore, $9.6 million in improper MCO payments went to in-network and out-of-network providers who were excluded from — or otherwise ineligible for — the Medicaid program ($548,184 of the $9.6 million was included in the $916 million referenced above.)
MCOs are supposed to maintain a network of providers that can deliver “comprehensive” care to their enrolled population. They submit their contracted providers to DOH’s provider network data system (PNDS) at least quarterly. The data system helps DOH ensure MCOs are meeting requirements of federal and state regulations and the providers are entered into the NYS Provider and Health Plan Look-up website.
DOH also uses PNDS to create error reports for MCOs to identify unenrolled in-network providers.
DiNapoli’s audit found PNDS error reports were “flawed” and did not capture all unenrolled in-network providers. Even when providers were identified on error reports, auditors found MCOs often did not make timely fixes to their submissions to DOH.
For example, one physician was flagged on 12 consecutive error reports for one MCO that indicated the physician was not enrolled. The audit concluded that the MCOs’ lack of response “could be attributed at least in part to inadequate DOH oversight and communication,” DiNapoli’s office said.
Recommendations
DiNapoli’s audit recommended that the state DOH needs to improve its oversight of MCO claim payments; ensure MCOs are following the requirements under the Act; and review the payments and providers the audit identified and take appropriate action, including recovering money where appropriate.
DOH “generally agreed with most” of the audit’s recommendations and said it is examining the audit findings to “determine how to best address the issues raised,” DiNapoli’s office said.
However, in its response, DOH pointed out its limited data “hindered” auditor’s matching of certain providers. DOH’s data limitations highlight that DOH has “not developed the infrastructure to accurately review MCOs’ compliance with the Act,” DiNapoli’s office contended in response.
To illustrate, DOH cited a provider from the audit findings that it said was enrolled, but auditors review of DOH’s records confirmed that it was not.
The audit also suggests that the findings “may have larger implications.” DiNapoli’s auditors reviewed claims from just five MCOs that indicated payments to unenrolled providers — just half of the payments to unenrolled providers identified in the audit period.
Accordingly, DOH’s inability to determine the extent of unenrolled or excluded providers who are still doing business with the state “puts Medicaid patients and taxpayers at risk,” DiNapoli’s office concluded.
