New York State Comptroller Thomas P. DiNapoli calls on New
York State Department of Health to improve oversight of managed care
organizations, seek to recoup money where appropriate.
An audit released on June 4, 2024 by New York State
Comptroller Thomas P. DiNapoli found Medicaid managed care organizations made
as much as $1.5 billion in improper and questionable payments to providers who
did not appear to be enrolled in Medicaid. Generally, under federal and state
law providers are supposed to be enrolled, a process that gives 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. “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.”
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 January 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.
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:
1. 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.
2. $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whose Medicaid application was denied or had been withdrawn by DOH either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withdrawn because the application was missing information.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 due to unclean conditions, lack of
proper supporting documentation, and expired medications on pharmacy shelves,
yet received over $57 million in MCO payments. ($212 million of the $832.5
million was included in the $916 million referenced above).
3. $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 audit recommended that DOH 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.
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. 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.
To download a copy of the Comptroller's audit click Medicaid
Program: Managed Care Payments to Unenrolled Providers.
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