Objective

To assess the extent of implementation of the eight recommendations included in our initial audit report, Medicaid Program – Improper Fee-for-Service Pharmacy Payments for Recipients With Third-Party Health Insurance (Report 2021-S-20).

About the Program

The Department of Health (DOH) administers New York’s Medicaid program. Under the fee-for-service (FFS) payment method, DOH makes Medicaid payments directly to health care providers for services rendered to Medicaid recipients. Medicaid is the payer of last resort and when Medicaid recipients have other third-party health insurance (TPHI) in addition to Medicaid (e.g., employer-based coverage, Medicare Part D), FFS providers are required to coordinate benefits with the recipient’s TPHI for payment prior to billing Medicaid. DOH uses post-payment reviews to identify instances where a TPHI carrier may have been liable for the cost of services provided to a Medicaid recipient. The Office of the Medicaid Inspector General (OMIG) contracted with Gainwell Technologies (Gainwell) to identify and recover Medicaid payments made for services that should have been paid for by a recipient’s TPHI.

The objective of our initial audit, issued May 11, 2023, was to determine if Medicaid made inappropriate FFS payments to pharmacies on behalf of recipients who had TPHI and, if so, whether appropriate recoveries were made. The audit covered the period from July 2016 through June 2021. The audit determined DOH and OMIG lacked adequate oversight of Gainwell’s recovery process to ensure all available recoveries on FFS pharmacy payments were made. The audit also found claim processing improvements could be made to prevent TPHI overpayments from occurring.

Key Finding

DOH and OMIG officials made minimal progress in addressing the problems we identified in the initial audit report and additional actions are needed. In particular, officials had not taken steps to look into and recover most of the FFS pharmacy payments identified in the initial report. Also, although OMIG is now receiving reports as required by its contract with Gainwell, including summary results of recovery efforts, OMIG was unable to provide evidence it used these reports to monitor the completeness and timeliness of Gainwell’s recoveries. We also found that DOH made eMedNY claims processing system enhancements, but the enhancements did not capture the entirety of the issues identified in the initial audit. Of the initial report’s eight audit recommendations, one was implemented, two were partially implemented, and five were 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.