HHS IG Audit: 'New York Generally Identified and Corrected Duplicate Children's Health Insurance Plan Payments Made to Managed Care Organizations'

WASHINGTON, April 28 -- The Health and Human Services Inspector General issued the following audit report (No. A-02-23-01017) on April 1, 2024, entitled "New York Generally Identified and Corrected Duplicate Children's Health Insurance Plan Payments Made to Managed Care Organizations" filed under the Centers for Medicare and Medicaid Services.

Here are excerpts:

* * *

Report in Brief

Why OIG Did This Audit

Previous OIG audits identified Federal Medicaid reimbursement for managed care payments that were not claimed in compliance with Federal requirements. Specifically, some individuals enrolled in Medicaid managed care had more than one identification number. As a result, Medicaid managed care organizations (MCOs) received unallowable monthly Medicaid payments for these beneficiaries. An analysis of New York Children Health Insurance Program (CHIP) data indicated that New York may have made similar unallowable, duplicate CHIP payments to MCOs.

Our objective was to determine whether New York claimed Federal reimbursement for duplicate CHIP payments made to MCOs.

How OIG Did This Audit

We limited our audit to potential CHIP payments New York may have made to MCOs for the same enrollee for the same month of coverage. Specifically, we identified 104 enrollee-matches with payments totaling $594,492 ($389,704 Federal share) that New York claimed for the period January 1, 2020, through December 31, 2022. For purposes of this audit, we defined an enrollee-match to be an individual for whom selected personal information (i.e., identical first five characters of first name, middle name initial, last name, and date of birth) was the same for more than one claim for the same month of coverage.

What OIG Found

New York generally did not claim Federal reimbursement for duplicate CHIP payments made to MCOs. New York identified and corrected duplicate CHIP payments associated with 100 of the 104 enrollee-matches we reviewed. Specifically, New York (1) appropriately determined that the CHIP payments associated with sampled enrollee-matches were for two different enrollees or (2) timely identified and corrected the duplicate CHIP payments made to MCOs. However, New York did not identify and correct duplicate CHIP payments to MCOs for the remaining four enrollee-matches totaling $24,679 ($7,026 Federal share).

What OIG Recommends and New York Comments

This report does not contain any recommendations because New York generally identified and corrected duplicate CHIP payments made to MCOs, and the amounts associated with the improper payments we identified were immaterial. We provided New York with our findings for the four enrollee-matches we identified to contain duplicate CHIP payments to MCOs so that it can evaluate these claims and decide whether to recover the improper payments in accordance with New York's policies and procedures.

In written comments to our draft report, New York thanked OIG for the opportunity to comment on our audit.

* * *

TABLE OF CONTENTS

INTRODUCTION ... 1

Why We Did This Audit ... 1

Objective ... 1

Background ... 1

State Children's Health Insurance Program ... 1

New York's Children's Health Insurance Program ... 1

How We Conducted This Audit ... 2

FINDING ... 3

CONCLUSION ... 4

STATE AGENCY COMMENTS ... 4

APPENDICES

A: Audit Scope and Methodology ... 5

B: Related Office of Inspector General Reports ... 7

C: State Agency Comments ... 8

* * *

INTRODUCTION

WHY WE DID THIS AUDIT

Previous Office of Inspector General (OIG) audits identified Federal Medicaid reimbursement for managed care payments that were not claimed in compliance with Federal requirements./1

Specifically, some individuals enrolled in Medicaid managed care had more than one identification number. As a result, Medicaid managed care organizations (MCOs) received unallowable monthly Medicaid payments for these enrollees. An analysis of New York Children Health Insurance Program (CHIP) data indicated that the New York State Department of Health (the State agency) may have made similar unallowable, duplicate CHIP payments to MCOs.

* * *

OBJECTIVE

Our objective was to determine whether the State agency claimed Federal reimbursement for duplicate CHIP payments made to MCOs.

* * *

BACKGROUND

State Children's Health Insurance Program

Title XXI of the Social Security Act authorizes Federal grants to States for providing child health assistance to uninsured, low-income children. The program is jointly financed by the Federal and State Governments and administered by the States. At the Federal level, the Centers for Medicare & Medicaid Services (CMS) administers the program. Each State administers its CHIP in accordance with a CMS-approved State plan. Within broad Federal rules, each State decides eligible groups, types and ranges of services, payment levels for benefit coverage, and administrative and operating procedures.

New York's Children's Health Insurance Program

In New York, the State agency administers CHIP. The program, also known as Child Health Plus, provides low-cost health coverage for children from birth through age 18 and perinatal services for pregnant women and unborn children. New York's State-based marketplace (the Marketplace) is responsible for determining eligibility for several State benefit programs, including CHIP. CHIP enrollment information is maintained by the State agency's Knowledge, Information and Data System (KIDS).

Capitation Payments

The State agency pays MCOs a monthly fee, known as a capitation payment, to ensure that each CHIP enrollee has access to a comprehensive range of medical services. A capitation payment is "a payment the State [agency] makes periodically to a contractor on behalf of each enrollee enrolled under a contract for the provision of medical services under the State plan.

The State agency makes the payment regardless of whether the particular enrollee receives services during the period covered by the payment" (42 CFR Sec. 438.2). The State agency's CMS-approved MCO contract states that the State agency may make recoveries for any improper billings for a person enrolled in the managed care program (New York Managed Care Contract Sec. 17.3). Also, the State agency must refund the Federal share of CHIP overpayments to CMS (42 CFR Sec. 457.232). Overpayments are amounts that exceed allowable amounts and include unallowable capitation payments made on behalf of the same enrollee for the same coverage of services.

Detection of Enrollees Assigned More Than One Identification Number

As part of the CHIP enrollment process, the State agency compares an applicant's information (e.g., Social Security number, date of birth, gender, and first and last names) obtained from the Marketplace to information on current CHIP enrollees maintained in KIDS to determine whether the applicant already exists in KIDS (i.e., the applicant already has what is referred to as a Marketplace identification number).2 If the State agency's computer system does not identify a Marketplace identification number assigned to the applicant, one is created and assigned to the applicant. In August of 2019, the State agency made enhancements to its computer system's processes to improve its ability to prevent any errors in assigning Marketplace identification numbers and potential duplicate enrollments.

* * *

FINDING

The State agency generally did not claim Federal reimbursement for duplicate CHIP payments made to MCOs. The State agency identified and corrected duplicate CHIP payments associated with 100 of the 104 enrollee-matches we reviewed. Specifically, the State agency (1) appropriately determined that CHIP payments associated with sampled enrollee-matches were for two different enrollees/3 or (2) timely identified and corrected the duplicate CHIP payments made to MCOs. However, the State agency did not identify and correct duplicate CHIP payments to MCOs for the remaining four enrollee-matches totaling $24,679 ($7,026 Federal share).

The State agency's CMS-approved MCO contract states that the State agency may make recoveries for any improper billings for a person enrolled in the managed care program (New York Managed Care Contract Sec. 17.3). Also, the State agency must refund the Federal share of CHIP overpayments to CMS (42 CFR Sec. 457.232). Overpayments are amounts that exceed allowable amounts and would include unallowable capitation payments made on behalf of the same enrollee for the same coverage of services.

The improper payments we identified occurred because the State agency did not obtain adequate information (e.g., Social Security numbers) for its computer system to identify all individuals enrolled more than once in CHIP. If the State agency had obtained this information, it could have compared it with a combination of other identifying information (e.g., first name, last name, and date of birth) to prevent duplicate CHIP payments to MCOs. The State agency stated that in August 2019, it made enhancements to its computer system's processes to improve its ability to prevent errors in assigning Marketplace identification numbers and potential duplicate enrollments./4

* * *

The report is posted at: https://oig.hhs.gov/documents/audit/9852/A-02-23-01017.pdf