Objective

To determine the extent of implementation of the two recommendations included in our initial audit report, Medicaid Program: Improper Medicaid Payments During Permissible Overlapping Medicaid and Essential Plan Coverage (Report 2022-S-35).

About the Program

The Department of Health (DOH) administers the State’s Medicaid program and the Essential Plan, both of which provide health care services to individuals who are economically disadvantaged. As eligibility factors change, individuals may transition between Medicaid and the Essential Plan, resulting in DOH-authorized periods of overlapping coverage. The Essential Plan should be the primary payer and Medicaid, as secondary payer, should pay any remaining liabilities, such as deductibles and coinsurance.

The objective of our initial audit, issued on September 14, 2023, was to determine whether Medicaid made improper payments on behalf of members with DOH-authorized overlapping Medicaid and Essential Plan coverage. The audit covered the period from January 2017 through November 2022. The audit found Medicaid improperly paid $93.7 million in claims during periods of overlapping Medicaid and Essential Plan coverage because DOH did not account for the Essential Plan as a liable third-party health insurance (i.e., primary payer).

Key Findings

DOH officials made some progress in addressing the problems identified in the initial audit report. For example, DOH deployed a new process in its claims processing system to recognize certain Essential Plan coverage as liable third-party health insurance. However, officials made minimal progress in recovering the improper payments identified by the initial audit. Of the initial report’s two audit recommendations, one was partially implemented and one was not implemented.

Key Recommendation

DOH officials are requested, but not required, to provide information about any actions planned to address the unresolved issues discussed in this follow-up within 30 days of the report’s issuance.