Lax oversight led to $292 million in overpayments from the state Medicaid program to never be recovered by New York officials, state Comptroller Tom DiNapoli’s office found in an audit released Wednesday.
The payments were part of pharmacy claims, covering instances in which Medicaid has paid medical bills a third-party insurer should have covered, but was never clawed back.
Both the state Department of Health as well as the Office of the Medicaid Inspector General should have done a more thorough job to ensure the payments were recovered, DiNapoli’s audit concluded.
“Medicaid is essential for millions of New Yorkers, but the program needs to ensure that funding is only used for appropriate costs for those who need it,” DiNapoli said. “This is my office’s latest audit to uncover weaknesses in the Medicaid system’s oversight. These potentially unnecessary payments likely contributed to significant waste and a missed opportunity to recover the nearly $300 million in questionable payments. DOH should recoup any overpayments and take steps to better protect taxpayers from costly billing mistakes.”
The Medicaid program is considered a payer of “last resort.” If a recipient has third-party insurance coverage, those benefits should be exhausted first before Medicaid funds are used.
DiNapoli’s audit covered October 2015 and May 2020, finding prescription drug claims that were paid by Medicaid managed care plans for which third party cairrers were not being billed.
The comptroller’s office recommended state health officials review Medicaid payments made on behalf of those who have third party health insurance and assess pharmacy claims that were billed to those carriers. The audit also proposed an assessment of third-party liability recovery for managed care pharmacy services.