New York
U.S. Department of Health and Human Services Office of Inspector General
Published September 21, 2026

New York Made Unallowable Managed Care Capitation Payments on Behalf of Incarcerated Medicaid Enrollees

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Source Document

Audit Scope

Scope includes capitation payments paid by New York State to managed care organizations for incarcerated Medicaid enrollees; reviewed 1,375 incarcerated enrollees.

Key Findings Summary

1

New York made unallowable capitation payments totaling $7,551,670 ($6,164,734 Federal share) on behalf of all 1,375 incarcerated Medicaid managed care enrollees in the audit.

AI-Assisted

Generated by gpt-5-nano

AI Scope Summary

The audit objectives focus on determining whether unallowable capitation payments were made for incarcerated Medicaid enrollees in New York, quantifying the total un-recovered amount, and outlining steps to recover funds and strengthen procedures to prevent recurrence in future audits.

AI-Generated Insight

The audit identifies a sizeable unallowable capitation payment amount ($7.55 million total with $6.164 million federal share) to New York’s Medicaid managed care organizations on behalf of incarcerated enrollees, with recommended refund and policy-strengthening actions. The finding highlights governance and data-matching controls weaknesses in identifying incarcerated individuals within Medicaid managed care to prevent future unallowable payments.

Audit Objectives

1

Determine whether New York made unallowable capitation payments on behalf of incarcerated Medicaid enrollees.

2

Identify the dollar amount of any unallowable capitation payments that were not recovered.

Audit Findings (1)

1

New York made unallowable capitation payments totaling $7,551,670 ($6,164,734 Federal share) on behalf of all 1,375 incarcerated Medicaid managed care enrollees in the audit.

Recommendations (2)

1

Refund $6,164,734 (Federal share) for unallowable capitation payments made on behalf of incarcerated Medicaid enrollees.

2

Strengthen policies and procedures to identify incarcerated individuals enrolled in Medicaid managed care.