Medicaid Program – Improper Payments for Laboratory and Related Services

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.

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.