Medicaid Program – Improper Payments for Laboratory and Related Services
Learn how the AI-generated research projects were createdOverall Conclusion
DOH did not provide adequate guidance to providers and MCOs, nor did it effectively monitor fee-for-service and managed care claims to ensure Medicaid paid only for necessary laboratory services. Weaknesses in DOH’s eMedNY system edits allowed improper fee-for-service laboratory payments totaling $21.6 million. The audit recommends strengthening guidance and system controls, with OMIG and DOH actions under way to address the issues and recover overpayments as appropriate.
Source Document
Audit Scope
Period June 2019 through December 2025 for lifetime limits; June 2019 through January 2025 for claims while members were hospitalized; interviews with DOH, OMIG, and MCOs; analysis of DOH policies, procedures, and Medicaid Data Warehouse data; non-statistical judgmental sampling.
Key Findings Summary
DOH did not provide adequate guidance to providers and MCOs, nor did it effectively monitor claims for certain laboratory procedures to ensure Medicaid paid only for necessary services; weaknesses in the eMedNY system edits designed to prevent improper fee-for-service laboratory payments contributed to a total of $21.6 million in improper payments.
AI-Assisted
AI Scope Summary
This audit assessed whether Medicaid paid improper amounts for laboratory and related services by examining lifetime-limit enforcement for laboratory procedures and improper services billed during hospital stays. The scope covered June 2019 through December 2025 for lifetime limits and June 2019 through January 2025 for inpatient hospitalization claims. The analysis identified significant weaknesses in DOH guidance and eMedNY controls, resulting in $21.6 million in improper payments, with recommendations aimed at strengthening controls, publishing guidance, and enhancing post-audit reviews.
AI-Generated Insight
The audit highlights critical gaps in lifetime-limit enforcement and inpatient rate policy, underscoring the need for tighter system controls, clearer guidance to MCOs, and ongoing post-audit analytics to prevent improper payments.
Audit Objectives
To determine whether Medicaid made improper payments for laboratory and related services.
Audit Findings (1)
DOH did not provide adequate guidance to providers and MCOs, nor did it effectively monitor claims for certain laboratory procedures to ensure Medicaid paid only for necessary services; weaknesses in the eMedNY system edits designed to prevent improper fee-for-service laboratory payments contributed to a total of $21.6 million in improper payments.
Recommendations (8)
Develop a risk-based approach to review the $19.8 million ($19.6 million + $214,477) for procedures paid more than once in a lifetime—giving particular focus to the highest-paid providers—and determine an appropriate course of action, including determining if any recoveries should be made.
Formally determine whether to provide the complete list of laboratory procedures with lifetime limits to providers and MCOs, and to publish guidance to help prevent improper payments.
Evaluate eMedNY controls for laboratory procedure codes to ensure proper lifetime limits are set, including a review of the: • “pend” edit that is not set up for laboratory-type claims, • “same provider” versus “all providers” edit settings, and • 25 procedure codes that DOH agreed should have lifetime limits.
Develop an ongoing process to identify and review the appropriateness of fee-for-service and encounter claims for high-risk procedures exceeding lifetime limits, such as the ones identified in this audit.
Review the $1.8 million in payments for laboratory and ordered ambulatory services while members were hospitalized and recover, as appropriate.
Ensure MCOs establish controls to prevent improper payments for laboratory and ordered ambulatory claims during inpatient stays.
Update eMedNY edits to prevent improper payments for laboratory and ordered ambulatory claims during inpatient stays.
Conduct a risk analysis to determine whether to restart post-audits of improper payments for laboratory and ordered ambulatory claims during inpatient stays.