Comptroller: Millions lost in Medicaid program to 'unnecessary, improper or questionable payments'

ALBANY, N.Y. (NEWS10)- Before the coronavirus pandemic created a nearly $13.3 billion revenue loss for New York, according to the New York State Division of the Budget, Governor Andrew Cuomo announced the formation of the Medicaid Redesign Team (MRT) II. The group comprised of healthcare experts, legislative members, and stakeholders was tapped to help the state cut $2.5 billion from its Medicaid program.

The New York State Comptroller's Office released five audits of the state's Medicaid program on Monday. The Comptroller's Office said it had discovered "approximately $706.6 million in unnecessary, improper or questionable payments". The total is a combined amount of all five audits.

The audits focused on specific areas of the Medicaid program: managed care pharmacy costs; payments for drugs no longer on the market; claims processing that resulted in illegitimate payments; payments for ineligible, or terminated Medicaid recipients; and duplication of payments. The Comptroller's office used information obtained from the New York Department of Health (DOH) to complete the audits.

“The state is facing budget gaps of billions of dollars because of the COVID-19 crisis and needs to find cost savings wherever it can. Hundreds of millions of dollars could be saved with better financial and management controls over the state’s Medicaid program. In recent years, my auditors have identified billions of dollars in waste in the program. Our oversight of the program will continue in earnest as DOH can do much more to save taxpayer dollars,” Comptroller Thomas DiNapoli said.

DOH Director of Public Information, Jonah Bruno, said the audits are misleading. He said that the MRT II as well as the Governor's Office have already identified areas in question and put into place plans that would change the existing Medicaid program structure to prevent fraudulent or improper payments.

"$605 million of the $706 million in potential savings identified by OSC (Office of the State Comptroller) relates to historical costs of pharmacy services under Managed Care, from 2016-2019, which the Department (of Health) believes are both overstated and also addressed through the Medicaid Redesign Team (MRT) II recommendation and 2020-21 enacted budget proposal to transition the Pharmacy benefit program from managed care to a fee-for-service system, effective 4/1/21," said Bruno.

Additional planned pharmacy benefit changes will further decrease pharmacy-related costs. The MRT II budget proposal will take action to transition pharmacy benefits to fee for service. Part of that plan would seek manufacturer rebates, promote the use of less expensive, equally effective prescription medications when appropriate, and "centralize the Medicaid programs negotiating power".

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