Millions of Medicaid payments went to unenrolled providers

Medicaid managed care organizations (MCOs) made millions of dollars in improper and questionable payments to health care providers who did not appear to be enrolled in Medicaid, according to an audit released Tuesday by New York State Comptroller Tom DiNapoli.

Providers are generally presumed to be registered under federal and state laws. The Department of Health pays for Medicaid in two ways: fee-for-service and managed care. Under fee-for-service, DOH pays Medicaid-enrolled health care providers directly for health care services. Under managed care, DOH pays monthly premiums to MCOs for each enrolled Medicaid recipient and in return, MCOs arrange services with providers.

Auditors reviewed claims from January 2018 through June 2022 and found $1.5 billion in inappropriate and questionable claims, including:

  • Five organizations paid $916 million in claims for services from in-network providers whose IDs did not match those of a Medicaid-enrolled provider on the date of service
  • $833 million in claims involved services from providers whose Medicaid applications were denied or withdrawn by DOH, either because they did not meet Medicaid program standards or were automatically withdrawn because information was missing from the application
  • $9.6 million in improper payments went to in-network and out-of-network providers who were excluded from or otherwise ineligible for the Medicaid program

“The deadline for managed care organizations and their providers to meet enrollment requirements was more than five years ago, but our audit shows that payments to providers who are still not enrolled in Medicaid or have been denied,” DiNapoli said in a statement declaration. “Medicaid is vital to millions of New Yorkers in need of quality health care, and the Department of Health must do a better job of ensuring the integrity of the program.”

DiNapoli recommended that the Department of Health improve oversight of MCO claim payouts, ensure MCOs are following requirements, review payments and providers identified by the audit, and take appropriate action, including recovering funds where necessary.

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