New York State Comptroller Issues Two Medicaid Audits Finding Multiple Problems
Department of Health – Medicaid Program: Oversight of Managed Care Provider Networks (2023-S-20)
Managed care organizations (MCOs) are required to submit their provider network to the Department of Health (DOH) quarterly, and this information is used to generate a deficiency report identifying areas where the MCO lacks enough providers in certain counties. MCOs are given an opportunity to dispute deficiencies and provide supporting information to have the deficiency removed and the remaining deficiencies are compiled into a quarterly Statement of Agreement for each MCO. Auditors determined that, in many instances, DOH did not follow its internal review guidance, Statements of Agreement contained inaccurate deficiencies, and deficiency statuses were not always updated, so it was unclear whether DOH took the additional steps needed to complete its quarterly network adequacy review. Auditors also found that DOH does not provide MCOs with adequate guidance regarding the deficiency review process or out-of-network provider payments, which may expose the Medicaid program to increased expenses. Further, despite having access to the Statement of Agreement data, DOH officials do not use this information to identify patterns or areas for improvement or to provide any other oversight of the network adequacy process.
When Medicaid members have other sources of health care coverage (third-party insurers), Medicaid is considered the payer of last resort and, as such, providers are required to coordinate benefits with third-party insurers before billing Medicaid for services. After processing a claim from a provider, the third-party insurer issues a statement to the provider, explaining the reason for any adjustments made to the claim amount. Claim Adjustment Reason Codes (CARCs) and group codes (such as PR, patient responsibility, and CO, contractual obligation) on statements detail the reason an adjustment was made to a claim and assign financial responsibility for the unpaid portion of the claim balance. CARC 45 occurs when the charge exceeds the maximum allowable fee and claims with a CARC PR 45 are currently configured to pay in eMedNY (DOH’s automated Medicaid claims processing and payment system), while claims with a CARC CO 45 are not. Auditors identified 69,166 claims totaling payments of almost $10.2 million billed with a PR 45. They sampled 58 of these claims billed with a PR 45 and identified billing issues on each claim that resulted in Medicaid overpayments of $1,778,546.
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