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‘System Flaws’ Lead To State Paying More Than $100 Million In Duplicate Payments

New York state paid more than $100 million in duplicate payments to managed care organizations for premiums over a more than four year period, according to a recent audit released by state Comptroller Thomas P. DiNapoli.

“System flaws and incorrect or incomplete information have caused duplicate Medicaid premium payments for a long time,” DiNapoli said. “The Department of Health needs to do a better job coordinating with all stakeholders in the Medicaid system to eliminate this waste, improve efficiency and streamline communication.”

The Medicaid program is a federal, state and local government-funded program that provides a wide range of medical services to people who are economically disadvantaged or have special health care needs.

Many of the state’s Medicaid recipients receive their services through managed care organizations. The Department of Health pays managed care organizations a monthly premium for each enrolled recipient and, in turn, the managed care organizations pay providers for services required by their members.

PATIENTS INCORRECTLY GETTING TWO ID NUMBERS

Each individual who applies for benefits under Medicaid is assigned a Client Identification Number (CIN). Individuals have several options for enrolling in Medicaid, and as a result may have more than one CIN assigned to them, but only one CIN should have active eligibility at a time.

DiNapoli’s auditors found this has not been the case. From Jan. 2014 to June 2018, the Health Department inappropriately made $102.1 million in Medicaid payments for managed care premiums on behalf of 65,961 recipients who had multiple CINs with active Medicaid eligibility.

Auditors found many breakdowns that led to the improper payments, including flaws at the local level for updating incorrect and incomplete applicant information.

They also found limitations in usage of the downstate and upstate Welfare Management Systems (WMS), and NY State of Health system flaws that failed to notify the Health Department’s payment system when some residents lost their Medicaid eligibility.

SOURCE OF PROBLEMS

The state’s departments of Social Services determine eligibility and enrollment for certain segments of the Medicaid program. Local districts use the Welfare Management System to process applicant data for the various public assistance programs, including Medicaid. The system is composed of two components: a downstate system for New York City area recipients and an upstate system for recipients in the rest of the state.

Under the federal Patient Protection and Affordable Care Act of 2010, the state developed the New York State of Health, an online marketplace where individuals may obtain health insurance coverage, including Medicaid. Of the 7.3 million recipients enrolled in Medicaid during state fiscal year 2017-18, about 3.7 million enrolled through the New York State of Health.

The Health Department, local Social Services districts and the state Office of the Medicaid Inspector General have processes to confirm and resolve cases of multiple CINs and to recover improper managed care premium payments. Because those are not fully integrated, many of these cases were not resolved quickly or remain unresolved and large amounts of improper duplicate premium payments remain unrecovered.

For example, auditors found:

¯ Many of the suspected cases of people with multiple CINs identified by the Health Department’s eMedNY system went unresolved. As a result, there was a backlog of cases needing review;

¯ Medicaid made duplicate managed care premium payments for many months for some cases because individuals with multiple CINs had overlapping managed care enrollment that had not been terminated in a timely manner; and

¯ Managed care organizationsdid not always identify multiple CIN cases as they should have.

DiNapoli recommended the Health Department:

¯ Review the $102.1 million in improper premium payments identified and make recoveries;

¯ Ensure local districts make timely and accurate updates to information on all Medicaid cases to allow proper CIN assignment for new applications and efficient reconciliation of existing duplicates;

¯ Evaluate the feasibility of building a central tracking database of potential multiple CIN cases that shows the status of each case and can be shared among all the stakeholders in the duplicate CIN research and resolution process;

¯ Ensure that the unit dedicated to multiple CIN research and resolution takes steps to improve the efficiency and timeliness of resolving duplicate CINs; and

¯ Evaluate the feasibility of creating a control to prevent confirmed multiple CINs from being reused in the future.

The Health Department agreed with many of the audit recommendations and indicated that certain actions have been and will be taken to address them. The department’s full response and auditors’ responses to certain comments are included in the audit.

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