Per the notice below, the Office of the New York State Comptroller (OSC) has issued an audit report finding that there were multiple improper Medicaid payments for high cost inpatient care that should have been billed as lower cost outpatient care -- and that Medicaid had done an inadequate job to address the billing problem.

Department of Health – Improper Medicaid Payments for Outpatient Services Billed as Inpatient Claims (Follow-Up) (2024-F-26)

A recipient’s status in a hospital—inpatient versus outpatient—affects Medicaid’s reimbursement for services provided, with outpatient services generally costing less.  A prior audit, issued in August 2023, identified 34,264 fee-for-service inpatient claims, totaling $360.6 million, where hospitals reported Medicaid recipients were discharged within 24 hours of admission, indicating a high risk that a portion of these claims were improper if the services provided should have been billed as outpatient.  From a judgmental sample of 190 claims, totaling $4,261,428, from six hospitals, auditors found 91 claims (48%), totaling $1,577,821, were billed improperly.  Department of Health and Office of the Medicaid Inspector General officials made little progress in addressing the problems identified in the initial audit report, partially implementing three of five recommendations and not implementing two.