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NEWS from the Office of the New York State Comptroller
Contact: Press Office 518-474-4015

State Will Save Millions After Audit Uncovers Unnecessary Medicaid Transportation Costs

Millions in Overpayments Should Be Recouped

December 15, 2017

New York state's Medicaid program is expected to save $7.6 million over the next five years as the result of actions taken by the state Department of Health (DOH) after an audit found it had incorrectly paid contractors for transportation management services it shouldn't have, according to a report released today by State Comptroller Thomas P. DiNapoli.

"Thanks to the work of my auditors, the state has tightened oversight of this important service and these changes will save millions of dollars," DiNapoli said. "The state Department of Health moved quickly to correct these problems, and my office will continue to monitor for overpayments and abuse in the Medicaid system."

The Medicaid program provides transportation to medical services for individuals who are unable to obtain their own transportation. DOH contracted with two companies to manage the non-emergency transportation program statewide: LogistiCare Solutions LLC and Medical Answering Services LLC. These companies were reimbursed nearly $180 million over the audit period, January 1, 2013 to December 31, 2016.

DiNapoli's auditors found that DOH overpaid these contractors more than $6.2 million during the audit period for transportation management services for individuals who were not eligible for these services. In response to the audit, DOH made changes, which are expected to save taxpayers another $7.6 million over the coming years.

Auditors also identified a provider of taxi services that overbilled DOH for tolls. The provider told auditors it charged for tolls based on the cash toll rate instead of the discounted amount it actually paid through its E-ZPass account. During the audit period, the provider billed Medicaid a total of $169,893 for tolls. In response to the work of auditors, the provider informed the Office of the Medicaid Inspector General (OMIG) of the overbilling. At the end of the audit fieldwork, the amount of the overpayment had not yet been determined by the OMIG.

DiNapoli's auditors also identified another provider of taxi services that did not have supporting documentation for claims totaling about $2.4 million, and four advanced life support first responder (ALSFR) providers that were inappropriately enrolled in Medicaid, resulting in $162,401 in inappropriate payments.

DiNapoli recommended DOH:

  • Recover the $6.2 million in contract overpayments to the transportation managers for the period January 2013 to December 2016 and ensure that Medicaid coverage groups are excluded from the monthly recipient counts that are used to pay transportation managers;
  • Review the Medicaid payments made to the two taxi providers and recover any improper payments as warranted; and
  • Review the Medicaid payments made to the four ALSFR providers and recover overpayments as warranted. Take the necessary corrective steps regarding the four ALSFR providers' future participation in the Medicaid program, and take steps to ensure that ALSFR companies are not enrolled as Medicaid providers.

DOH's response is included in the audit.

Read the report, or go to:

For access to state and local government spending, public authority financial data and information on 140,000 state contracts, visit Open Book New York. The easy-to-use website was created to promote transparency in government and provide taxpayers with better access to financial data.