Medicaid Program – Medicaid Overpayments for Medicare Advantage Plan Services

Issued Date
December 11, 2018
Health, Department of (Medicaid Program)


To determine if the Department of Health overpaid health care providers’ Medicaid claims for services also covered by Medicare Advantage plans. The audit covered the period from January 1, 2013 to July 31, 2017.


Many Medicaid recipients are also enrolled in Medicare Part C, also known as Medicare Managed Care or Medicare Advantage. Under Medicare Part C, private managed care companies administer Medicare benefits and offer different health care plans (referred to as Medicare Advantage plans) tailored to the specific needs of Medicare beneficiaries. Some Medicare Advantage plans (Plans) also offer supplemental insurance benefits for services that are not covered by original Medicare (e.g., dental services). Plans reimburse health care providers for services provided to enrollees. Generally, Medicaid is the secondary payer, and covers any financial balances that are not covered by the Plans (typically deductibles and coinsurance).

If Plans deny a claim or pay a different amount than what a provider billed, Plans must communicate the reasons why to providers on the Explanation of Benefits (EOB) using Claim Adjustment Reason Codes (CARCs). Providers submit claims for unpaid amounts to Medicaid through eMedNY, the Department of Health’s (Department) automated claims processing and payment system. When submitting claims, providers are required to include the Plan-reported CARCs. The eMedNY system uses the CARCs to determine whether a billed service is eligible for payment as well as the correct payment amount.

Key Findings

During the audit period, January 1, 2013 through July 31, 2017, Medicaid was the primary payer on 92,296 claims totaling almost $12.8 million for services typically covered by a recipient’s Plan. We sampled 266 such claims (totaling $220,661 in Medicaid payments) to determine the appropriateness of the payments. Among our findings:

  • For 187 claims (70 percent of the 266 claims), the provider either never billed the Plan for the services, incorrectly indicated a Plan payment of zero on its Medicaid claim, or did not follow the Plan’s billing guidelines. Medicaid paid $183,019 on these claims, while its actual obligation amounted to only $5,484 – a difference of $177,535. During the audit, certain providers acknowledged receiving overpayments and repaid Medicaid $25,300, leaving $152,235 to be recovered.
  • The Department does not enforce the CARC requirement on claims. Of 108 claims for which we obtained EOBs from providers, 98 claims were submitted to eMedNY without a CARC and 5 were submitted with an incorrect CARC. Without the appropriate CARC, eMedNY is at risk of improperly adjudicating – and overpaying – claims.

Key Recommendations

  • Review and recover the remaining overpayments totaling $152,235, as appropriate.
  • Formally assess the 92,030 higher-risk claims totaling almost $12.6 million and recover overpayments as warranted. Ensure prompt attention is paid to those providers that received the largest dollar amounts of payments.
  • Develop a process to monitor whether providers are reporting CARCs appropriately.

Other Related Audits/Reports of Interest

Department of Health: Overpayments for Medicare Part C Coinsurance Charges (2011-S-33)
Department of Health: Medicaid Overpayments for Certain Medicare Part C Claims (2013-S-35)

Andrea Inman

State Government Accountability Contact Information:
Audit Director: Andrea Inman
Phone: (518) 474-3271; Email: [email protected]
Address: Office of the State Comptroller; Division of State Government Accountability; 110 State Street, 11th Floor; Albany, NY 12236