Audit reveals state paid $1.28 billion in unnecessary Medicaid payments

June 13--State taxpayers shelled out $1.28 billion for unnecessary Medicaid managed care premiums to cover patients who already had private insurance, a new audit Wednesday revealed.

State Controller Thomas DiNapoli's audit, which covered a 6-year period that ended in 2017, criticized the state Health Department for not doing enough to weed out patients with "concurrent" private insurance from its Medicaid payment system and urged officials to do more to recover money already paid out.

DiNapoli noted that existing policies prevent the Health Department from recovering the vast majority of the money -- about $1.17 billion -- because the Medicaid managed care provider was not the same as the provider used by the private insurance company

"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 payments."

About 4.4 million New Yorkers were enrolled in Medicaid managed care programs as of August, 2017 and, according to the audit, there were more than 3.4 million unnecessary premiums paid out during the 6-year period to patients who also had private insurance.

The audit said part of the blame also lies with local social service departments -- including the New York City Human Resources Administration -- that enroll people in Medicaid but do not do proper checks to ensure the recipients don't also have insurance. Recipients enrolled by HRA accounted for $569 million of the $1.28 billion in unnecessary payments paid by the state.

HRA officials told DiNapoli's probers that they only dis-enroll recipients when comprehensive third-party insurance coverage "becomes apparent to them," the audit reported. DiNapoli said his auditors are working with HRA officials to better address the issue.

State health officials did not immediately respond to a request for comment but in an official response to DiNapoli's audit said they were already working to address many of the issues raised in the report.

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