ALBANY, N.Y. (NEXSTAR) — The Office of Comptroller Thomas DiNapoli found that the State Department of Health may have improperly paid over $2.6 billion in Medicaid premiums for people who do not live in New York. The audit, which covered July 2017 through October 2024, showed that DOH didn’t properly verify the residency status of Medicaid members.
“Medicaid is a vital program and the single biggest expense in the state budget,” DiNapoli said. “We cannot afford any wasteful spending.”
The $2.6 total includes almost $1.2 billion in managed care premiums paid for state Medicaid members who may have moved away, and $1.5 billion more in premiums for members whose residency status wasn’t reviewed by DOH.
New York’s Medicaid program covered close to 7 million as of July. That number included almost 4 million with New York City addresses and another 3 million or so in the rest of the state. It’s jointly funded by the federal government, the state, and localities, with the feds paying about 57%.
To get benefits, New York’s Medicaid program requires in-state residency. Most state Medicaid members are enrolled in managed care plans, for which DOH pays a monthly premium. In the fiscal year that ended on March 31, 2024, the program cost about $87.5 billion, with almost $46 billion for managed care premiums and about $41.7 billion more for other health care payments.
If a member moves out of state, they’re supposed to be taken off their plan, and the any payments from the time they were not a resident are supposed to be returned. The audit found that DOH faced problems with identifying people who left the state.
DOH had already moved to fix some of those problems as the audit was underway. Even so, the problems and improper payments turned up in the Comptroller’s audit included:
- DOH paid $509 million in premiums for 155,181 members who may have been living outside of New York.
- DOH paid $375 million in premiums for members enrolled through NY State of Health, the state’s online health insurance marketplace. These members were flagged by the federal Public Assistance Reporting Information System but were not checked by DOH because of processing errors.
- 631,514 NY State of Health members were not submitted for a PARIS match at all because their Social Security numbers were incorrectly marked as unverified.
- DOH paid $299 million in premiums for members whose eligibility already ended because of PARIS matches, but the improper premiums were not recovered. Of that amount, $234 million was for premiums not recovered, while $65 million was for ineligible members.
- DOH didn’t start submitting NY State of Health member data for PARIS matching until May 2017 and didn’t start reviewing match results until October 2019. This caused an additional $1.5 billion in premiums.
In one example from the audit, the state Medicaid program paid 45 monthly premiums totaling over $100,000 for someone who moved out of state in May 2020. Although they hadn’t used any New York Medicaid services since February 2020, the state still paid out from June 2020 through February 2024.
DiNapoli’s audit found that the process for verifying Medicaid enrollment only used PARIS—which compares public assistance program enrollment data across all 50 states, the District of Columbia, and Puerto Rico using Social Security numbers—to find members living outside of New York. But according to the audit, some states don’t update PARIS data each quarter, which slows down the system. It also only includes members receiving other benefits in another state, which would not include everyone who moved out of New York.
The audit recommended that DOH use other data to find out-of-state members of the state program. That data could come from the National Change of Address report or the eMedNY system.
For its part, a representative from DOH took issue with the data, saying that the audit sometimes used outdated eligibility periods from other states that didn’t match with current residency. The department said that some members had infinite end dates in other states, making overlaps look bigger than they really were. In other cases, DOH said continued use of New York Medicaid proves they were in-state residents.
DOH also disagreed with the Comptroller’s methodology. Instead of using random samples, the audit relied on “judgmental sampling,” which could reflect biases or overstate problems.
Plus, according to DOH, from March 2020 through July 2023, states were legally blocked from terminating Medicaid coverage until the end of someone’s renewal cycle, even if they changed residency or their mail was returned. DOH also reported enacting new quality control measures and that some of the $47 million the Comptroller’s office marked as “overpayments” were actually proper payments, confirmed by new eligibility checks.
DOH also said that the Office of the Medicaid Inspector General has already recovered over $22 million from its own PARIS audit while reviewing cases. But the according to OMIG, they might’ve already missed the chance to claw back as much as $11.4 million of the improper payouts because of rules about how far back they can look.
“The comptroller’s audit raises serious concerns,” said Republican State Senator Patrick Gallivan, ranking member of the state senate’s committee on health. “DOH should take necessary steps to recover improper payments and procedures that should have been in place all along should be implemented immediately to better protect taxpayer dollars.”
Republican State Senator Jake Ashby, another member of senate health, took a harder position. He said that local Democrats shouldn’t blame Washington for its Medicaid problems when “audit after audit uncovers inappropriate payments, serious mismanagement and ineligible beneficiaries.”
And Congressmember Elise Stefanik, gearing up to represent the Republican party in the upcoming race for governor of New York, blamed the issue on Governor Kathy Hochul. She characterized the state’s finances as a catastrophe, calling ours “the worst run Medicaid program in the entire country.” She tweeted, “Hardworking New York taxpayers are footing the billion dollar bill for this sheer incompetence.”
Take a look at the audit below:
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