The bulk of those wasted funds cannot be recovered, state
comptroller says
By Caroline
Lewis June 13, 2018 3:54 p.m. Updated 06/13/2018
Thanks
to a lack of oversight, the state Health Department doled out $1.3 billion in
six years in Medicaid premiums for people who were already enrolled in other
comprehensive health plans, according to a new report from state
Comptroller Thomas DiNapoli.
The
report found that the state Health Department is not quick enough to disenroll
people when they sign up for coverage with another insurer. The overwhelming
majority of those funds—about $1.2 billion—are not recoverable.
"Glitches
in the state Department of Health's payment system and other problems led to
over a billion dollars in unnecessary spending," DiNapoli said. "The
department needs to improve its procedures and stop this waste of taxpayer
money."
The
waste in question, while considerable, accounts for a fraction of the annual
Medicaid budget. New York's Medicaid program, which is funded by federal, state
and local governments, spent $58 billion for services for some 7.4 million
members in fiscal 2017 alone.
The
majority of Medicaid members in New York are enrolled in mainstream Medicaid
managed-care plans, which are run by private companies or nonprofit
organizations that receive monthly payments for each member from the
government. The state Health Department is responsible for disenrolling members
from those Medicaid plans as soon as it learns they have enrolled in another
comprehensive health plan.
The
state Office of the Medicaid Inspector General contracts with a company called
Health Management Systems to obtain that information and enter it into the
system the state uses to process Medicaid claims. The New York State of Health
online insurance marketplace and local social services departments also collect
enrollment information.
Yet,
according to the audit, the Health Department too often learns about Medicaid
members' enrollment in third-party plans well after the fact.
In
some of the cases the comptroller's office examined, a person enrolled in a
Medicaid plan was also enrolled in another plan run by the same entity. In
those cases, the state can easily recover any Medicaid premiums paid while the
coverage overlapped. Those cases account for about $26.9 million of the excess
funds paid during the audit period, which extended from January 2012 to
September of last year.
In
other cases, Medicaid recipients were enrolled in a plan from a company that
owned or was related in some other way to the one that operated their Medicaid
plan. In those cases, which account for $70.6 million of the excess funds paid
during the audit period, the state will have to review the relationships
between the companies to determine whether it can recover the money.
But
the state has no recourse to recover the $1.2 billion from Medicaid members
enrolled in plans operated by third-party insurers with no relation to the
company operating the Medicaid plan, the comptroller said.
The
comptroller offered several recommendations to the state Health Department to
help prevent such losses in the future, only some of which the Health
Department said it would consider. One suggestion was for the state to work out
agreements with third-party insurers to get them to provide more frequent
enrollment updates. The Health Department said in its response to the audit
that while it would "explore the opportunity," there's no law in
place specifying how frequently third-party insurers have to provide such
information.
The
state is working with Health Management Systems to review the excess payments
identified in the audit and has so far recovered at least $34.7 million,
according to the report.
"The
Department is committed to protecting taxpayer dollars and ensuring that every
New Yorker has access to high quality health care," the Health Department
said in a statement Wednesday. "We are already conducting comprehensive
reviews of our Medicaid programs, to make sure that payments to Medicaid
managed care plans are not made inappropriately, and are working diligently
with the Office of the Medicaid Inspector General to prevent such payments in
the future and to recoup excess funding."
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