%20(1)_edited.png)
Audit Reveals $16.2 Million in Improper Medicaid Payments by New York State Health Department
A recent audit conducted by New York State Comptroller Thomas P. DiNapoli has uncovered $16.2 million in improper Medicaid payments processed through the eMedNY computer system over a six-month period starting in October 2023. The findings, released today, highlight systemic errors and policy noncompliance that contributed to millions in wasteful spending.
Medicaid Mismanagement: Key Findings
Between October 2023 and March 2024, 370 million claims were processed, amounting to nearly $49.6 billion in Medicaid payments. However, the audit revealed that thousands of claims were improperly paid, with the most significant issue stemming from ineligible Medicaid managed care recipients.
Among the most costly mistakes identified:
$11.8 million was spent on 27,480 Medicaid managed care premiums for individuals who were ineligible because they had comprehensive third-party insurance and should have been enrolled in Medicaid fee-for-service instead.
$2.8 million of these improper payments have already been recovered.
$2 million was wrongly paid for fee-for-service inpatient claims that should have been covered by managed care.
$1.3 million was spent on newborn birth and maternity claims that contained inaccurate information, such as underreported birth weights, which inflated reimbursement amounts.
$964,333 was improperly paid for inpatient, pharmacy, referred ambulatory, and clinic claims that failed to comply with Medicaid policies.
$126,786 was paid in cases where Medicaid was incorrectly designated as the primary payer, despite another insurer being responsible.
$35,441 was spent on managed care premiums for incarcerated recipients, whose coverage should have been suspended.
Fraudulent Providers Also Identified
Beyond the financial mismanagement, the audit also flagged 10 Medicaid providers who had been charged with or convicted of crimes related to healthcare fraud or noncompliance.
As a result, the Department of Health (DOH) removed nine of these providers from the Medicaid program, while the status of the remaining provider is still under review.
Comptroller DiNapoli: ‘Errors Can Be Costly’
Comptroller DiNapoli emphasized the importance of stronger oversight and stricter enforcement measures to prevent future wasteful spending.
“My office pays close attention to Medicaid because it’s critical for so many New Yorkers and a major driver of state spending,” DiNapoli said. “Errors can be costly. Our latest audit found areas where the Department of Health can do better and avoid improper and wasteful spending of taxpayer dollars. By acting swiftly on the audit's recommendations, DOH has already recovered millions of dollars.”
Recommended Fixes & DOH’s Response
The audit provided 10 key recommendations to improve Medicaid billing accuracy and financial accountability, including:
Ensuring hospitals and providers report and bill Medicaid accurately.
Strengthening oversight of managed care enrollment.
Recovering improperly paid funds.
In response, the Department of Health (DOH) noted that it has already taken corrective action based on the audit’s findings. The Office of the Medicaid Inspector General continues to investigate fraudulent providers and compliance violations to ensure taxpayer dollars are being spent appropriately.
As Medicaid remains a vital lifeline for millions of New Yorkers, state officials are under pressure to tighten oversight, improve billing systems, and prevent future financial mismanagement.
Comments