Medicaid Program: Overpayments for Medicare Part C Claims
Learn how the AI-generated research projects were createdOverall Conclusion
DOH oversight identified improper Medicaid payments related to Medicare Part C cost-sharing, primarily driven by provider misinterpretation of rules, incomplete CARC reporting, and system limitations. The audit results indicate substantial recoveries and opportunities to strengthen controls, including follow-up on remaining overpayments, ongoing hospital monitoring, enhancements to eMedNY, and exploring APD data validation to improve eligibility and payment accuracy.
Source Document
Audit Scope
Audit of Medicaid payments for Medicare Part C claims for dual-eligible recipients under Medicare Advantage Plans, covering the period May 2018 through April 2023. The audit focused on hospital-based inpatient and outpatient services (excluding mental and behavioral health services) submitted to Medicaid for Part C cost-sharing liabilities, reporting adjustments via EOBs with CARCs, and the accuracy of the information reported to eMedNY. The analysis used data from DOH’s Medicaid Data Warehouse (MDW) and DOH’s eMedNY system, with a judgmental sample of 89 high-risk Part C claims drawn from five hospitals (Hospitals A–E) to assess improper payments. It did not project results to the entire population due to non-statistical sampling.
Key Findings Summary
Audited Part C claims for dual-eligible recipients from May 2018 through April 2023 identified 212,131 claims totaling about $121.4 million in high-risk categories for improper payment (coinsurance, deductible, zero-filled).
Judgmental sample of 89 claims totaling $1,325,452 found 49 overpayments totaling $881,233 (55%), with 66 of 89 claims improperly billed (74%).
By end of audit, 19 of 49 overpaid claims had been adjusted, saving $183,570; 30 remaining overpayments totaling $704,989 ($697,663 overpaid) require follow-up and recovery where appropriate.
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AI-Assisted
AI Scope Summary
To build on this audit, future work could focus on ongoing monitoring of Part C claim submissions, expanding risk-based reviews to additional hospitals and plans, and evaluating the use of APD data to verify Part C cost-sharing reporting on Medicaid claims.
AI-Generated Insight
This audit highlights systemic misalignments between Medicare Part C cost-sharing rules and hospital billing practices, revealing that most improper payments were linked to deductible and zero-filled claims caused by reporting gaps and system limitations. Strengthening CARC reporting, expanding automated edits like ZEROFILL PEND CRITERIA, and leveraging the All-Payer Database for data validation could substantially reduce improper payments and improve program integrity for dual-eligible beneficiaries. The findings also underscore the value of data-sharing partnerships among DOH, OMIG, and external data sources to verify complex cost-sharing reporting across payer lines.
Audit Objectives
To determine whether Medicaid made improper payments on Medicare Part C claims for recipients covered by Medicare Advantage Plans.
Audit Findings (5)
Audited Part C claims for dual-eligible recipients from May 2018 through April 2023 identified 212,131 claims totaling about $121.4 million in high-risk categories for improper payment (coinsurance, deductible, zero-filled).
Judgmental sample of 89 claims totaling $1,325,452 found 49 overpayments totaling $881,233 (55%), with 66 of 89 claims improperly billed (74%).
By end of audit, 19 of 49 overpaid claims had been adjusted, saving $183,570; 30 remaining overpayments totaling $704,989 ($697,663 overpaid) require follow-up and recovery where appropriate.
Improper payments occurred due to hospital misinterpretation of state regulations and billing guidelines, hospitals not reporting CARCs, incorrect reporting of cost-sharing amounts, and limitations of the eMedNY system.
Hospital C accounted for a large share of zero-filled inpatient claims; 1,366 zero-filled inpatient claims in the population, with many lacking CARCs on Medicaid claims; DOH to strengthen CARC reporting and system controls.
Recommendations (8)
Remind hospitals to correctly report Part C cost-sharing liabilities; cost-sharing reimbursement rules for Part C claims; that Part C benefits must be exhausted prior to billing Medicaid for services (including claims in appeal); and to include all CARCs on Part C Plan EOBs.
Assess the feasibility of implementing eMedNY system changes that would require hospitals to report CARCs.
Enhance eMedNY system controls to prevent unreasonable inpatient Part C deductible claim payments.
Prioritize the ongoing assessment of the functionality of applying edit 02304 “ZEROFILL PEND CRITERIA” to inpatient and clinic claims.
Engage with stakeholders and assess the feasibility of using the Part C claim data in the APD to verify whether Part C cost-sharing information is properly reported on Medicaid claims.
Review the 30 (49 - 19) improperly billed claims totaling $704,989 from our sample that had not been adjusted by providers and recover overpayments, as appropriate.
Perform ongoing monitoring of Part C claims billed by the hospitals identified in this report to ensure the hospitals take actions to correct billing issues and any additional recoveries are made.
Develop an ongoing process, using a risk-based approach, to identify and review hospitals that bill questionable Part C claims, such as those with a high volume of zero-filled claims and those that bill suspicious deductible amounts; recover identified overpayments; and ensure hospitals take steps to correct ongoing billing errors.