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State Audit: NY Medicaid Paying for Coverage of Deceased

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Enrolled dead in Medicaid, offered health coverage

A state audit results released on Thursday, October 29 revealed major flaws in New York’s health exchange, reports CNBC. Apparently, dead people were being enrolled in Medicaid and a vast majority was receiving continuing government-funded health coverage after they died at a $325,000 cost to taxpayers.

According to NY Daily News, the State Controller Thomas DiNapoli’s office reported that its auditors found overpayments of $3.4 million for the year starting October 1, 2013, when the exchange began operating. That included $325,000 in coverage for the deceased.

Between 2013 and 2014, the health exchange improperly enrolled 354 deceased individuals which were identified by the state Health Department as “active Medicaid recipients.”

As a result, Medicaid inappropriately paid $325,030 in claims associated with 230 of the 354 deceased enrollees, Comptroller Thomas DiNapoli stated in the audit. As such, the Health allowed hundreds of deceased individuals to receive Medicaid benefits and led to nearly $3.4 million in overpayments.

DiNapoli’s report also accused state health officials of denying auditors access to critical information that would have furthered the review. “In the course of this audit, we experienced several impediments to our audit efforts,” the report stated.

According to Vos Iz Neias, health officials also confirmed that 321 of the 354 individuals cited in the audit were dead but said that four are still alive. They are still in the process of checking the other 29 people.

New York’s Medicaid enforcement efforts in 2011 through 2013 recovered $1.73 billion, they said. Meanwhile the state has cut spending growth to 1.7 percent annually.

More than 2 million people have been enrolled in the program since it started. Medicaid covers about 6 million low-income New Yorkers and costs about $60 million annually. It’s paid almost half by the federal government, one-third by the state and the rest by counties and New York City.

Overall, overpayments during the first year of the program were mainly caused through the same people having multiple identification numbers, the audit said.

“The overpayments occurred because the department did not conduct sufficient periodic verifications of enrollees’ life status to remove deceased individuals from active Medicaid enrollment,” the audit states.

The report further stated that, “only by chance does New York State of Health receive notification of the death of an enrolled recipient and begin the process to end Medicaid coverage,” the report said.

The auditors said the state also issued multiple identification numbers to several thousand adults, children, newborns and even some unborn children who enrolled, resulting in Medicaid overpayments of $2.8 million.

Officials said the Social Security database was initially used to check for deaths and the department has been awaiting a new federal service for further verification. Last year, they implemented a manual process to link and eliminate payments under duplicate identification numbers.

According to NY Daily News, state health officials defended the exchange, noting that the audit covered a period when the health exchange was in its infancy and arguing that the federal government has been slow to initiate a program to check enrollees against death records

They said of the program that it “experienced some growing pains to be expected with the launch of a brand new system,” the health department wrote in response to the audit. “Steps were, and continue to be, taken to ensure that NYSOH enrollment processes are working as intended, and when needed, improvements are identified and implemented.”

The health department said it has improved its verification system since the early stages of the program, which started in 2013, and the 354 cases were a fraction of the overall program. The health department established the exchange and runs it. It disputed several audit findings in a written response.

This story has been corrected to show that the Medicaid enforcement recoveries of $1.73 billion were for the years 2011-2013, not 2011-2012, reports CNBC.

The findings come as the third-annual enrollment period for the New York State of Health program under the federal Affordable Care Act starts Sunday.

Dina Hoffmann

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