Medicaid-managed care organizations (MCOs) made millions of dollars in improper and questionable payments to providers who did not appear to be enrolled in Medicaid, according to an audit released Tuesday by New York state Comptroller Tom DiNapoli.

Providers are supposed to be enrolled generally under federal and state law. The state Department of Health pays for Medicaid in two ways — fee-for-service and managed care. Under fee-for-service, DOH pays Medicaid enrolled providers directly for health care services. Under managed care, DOH pays monthly premiums to MCOs for each enrolled Medicaid recipient and in exchange MCOs arrange for services with providers.

Auditors reviewed claims from January 2018 through June 2022 and found $1.5 billion in improper and questionable claims, such as:

• Five organizations paid $916 million in claims for services by in-network providers whose IDs did not match with a Medicaid enrolled provider on the date of service
• $833 million in claims were for services by providers whose Medicaid application was denied or had been withdrawn by DOH either because they failed to meet Medicaid program standards or were automatically withdrawn because the application was missing information
• $9.6 million in improper payments went to in-network and out-of-network providers who were excluded from or otherwise ineligible for the Medicaid program

“The deadline for managed care organizations and their providers to comply with enrollment requirements was over five years ago, yet our audit shows payments to providers that are still not enrolled in Medicaid or have been denied, ” DiNapoli said in a statement. “Medicaid is vital to millions of New Yorkers in need of quality health care and the Department of Health must do a better job ensuring the program’s integrity.”  

DiNapoli’s recommended that the Health Department improve its oversight of MCO claim payments, ensure MCOs are following the requirements and review the payments and providers the audit identified and take appropriate action, including recovering money where appropriate.