Objective

To determine if Medicaid made overpayments to providers who reported claims with a PR 45 cost-sharing amount. The audit covered the period from December 2020 through May 2024.

About the Program

The Department of Health (DOH) administers New York State’s Medicaid program. Medicaid members may have other sources of health care coverage, such as Medicare and group health plans (third-party insurers). Medicaid is considered the payer of last resort and, as such, providers are required to coordinate benefits with third-party insurers prior to billing Medicaid for services. After processing a claim from a provider, the third-party insurer issues an electronic remittance advice (ERA) statement to the provider, explaining the reason for any adjustments made to the claim amount. Claim Adjustment Reason Codes (CARCs) and group codes are standard codes on ERAs that detail the reason an adjustment was made to a claim and assign financial responsibility for the unpaid portion of the claim balance. Group codes include PR (patient responsibility) and CO (contractual obligation). CARC 45 occurs when the charge exceeds the maximum allowable fee. Providers can submit claims for unpaid cost-sharing, such as deductibles, copayments, and coinsurance, through eMedNY, DOH’s automated Medicaid claims processing and payment system. Claims with a CARC PR 45 are currently configured to pay in eMedNY, while claims with a CARC CO 45 are not. All claims submitted for Medicaid members with Medicare and/or other third-party insurance must accurately reflect payments, adjustments (CARCs), and denials received from other insurers to allow correct calculation of Medicaid reimbursement amounts.

Key Findings

We found that DOH lacked adequate oversight of the coordination of benefits process, resulting in Medicaid overpayments to providers who misapplied CARC PR 45 on claims. During the audit period, we identified 69,166 claims totaling payments of almost $10.2 million billed with a PR 45. We sampled 58 claims and identified billing issues on each claim that resulted in Medicaid overpayments of $1,778,546, as follows:

• 17 claims totaling overpayments of $1,775,326 caused by an internal processing error at one Medicare Advantage plan
• 41 claims totaling overpayments of $3,220 for Medicaid claims not supported by the documentation provided

Key Recommendations

• Review the improperly billed claims we sampled that have not been adjusted and recover overpayments, as appropriate.
• Use a risk-based approach to review the remaining claims in our population.
• Develop controls to ensure claims submitted with a CARC PR 45 are accurately submitted by providers.