DiNapoli: New York May Be Paying Medicaid Premiums for People Living Out-of-State

An audit released todayby State Comptroller Thomas P. DiNapoli found multiple issues with how the state identified out-of-state Medicaid members, and found close to $1.2 billion in managed care premiums that were paid for members who may have resided outside of New York. Auditors found that the state Department of Health (DOH) did not properly check to confirm that Medicaid members were New York residents and waited too long to recoup improper payments.

"Medicaid is a vital program and the single biggest expense in the state budget. We cannot afford any wasteful spending," DiNapoli said. "If a person is enrolled in more than one state at the same time, both states may end up paying premiums to his or her managed care plans. Responsibility for preventing enrollment in more than one state lies at both the federal and state levels, and stronger coordination is needed to reduce improper payments, protect the program's integrity, and ensure New York is only paying Medicaid costs for its residents."

Medicaid members are enrolled through the New York State of Health (NYSOH) or through local departments of social services (Local Districts). Most of the state's Medicaid members are enrolled in managed care plans, which are responsible for ensuring members have access to a range of health care services and reimbursing providers for those services. In exchange, DOH pays the plans a monthly premium for each enrolled member. Generally speaking, if a member who is enrolled in a managed care plan no longer resides in New York, they should be disenrolled from their plan and the plan must return premiums paid for periods when the member was not a resident. The audit examined the period from July 2017 through October 2024.

The audit found that DOH did not start submitting NYSOH's member data for matching in the federal Public Assistance Reporting Information System (PARIS), which matches enrollment data of public assistance programs like Medicaid across all 50 states, until May 2017, nearly three years after NYSOH started. DOH did not start reviews of the NYSOH PARIS match results until two years later, in October 2019. The audit identified $1.5 billion in premium payments that were made from 2017 to 2019 for unreviewed NYSOH members.

Auditors identified an additional $1.2 billion in managed care premiums paid for members that potentially resided outside New York as follows:

• $509 million in premiums paid for 155,181 members who may have resided outside of New York according to data sources other than PARIS, such as the U.S. Postal Service's National Change of Address (NCOA) information. For example, a member appeared on a May 2020 NCOA report with a forwarding address in Florida. The individual had no Medicaid services in NY since February 2020, but Medicaid made 45 monthly premium payments totaling $100,859 from June 2020 through February 2024. The member was still active and enrolled in managed care as of the end of the audit.
• $375 million in premiums paid for NYSOH-enrolled members who were identified on a PARIS match but were not reviewed by DOH to confirm residency because of flaws in NYSOH's processing that caused the omissions.
• $299 million in premiums paid for members whose eligibility was ended due to PARIS matches but the improper premiums were not recovered ($234 million), or the member's eligibility was flagged to be closed but was not officially ended and premiums continued to be paid ($65 million).

Even when DOH and Local Districts closed the eligibility of members identified by the PARIS match, DOH and the Office of the Medicaid Inspector General (OMIG) did not always take sufficient steps to recover premium payments for the time when the members resided outside the state. OMIG officials indicated they may have lost the opportunity to recover up to $11.4 million of the improper premiums DiNapoli's office identified due to regulatory look-back provisions. DiNapoli encouraged OMIG to expedite a review of the audit findings to recover improper premium payments made on behalf of people living out-of-state where appropriate.

While all states, the District of Columbia, and Puerto Rico participate in the federal PARIS match, not all of them participate every quarter, which can impact the effectiveness of the identification of out-of-state members.

DiNapoli recommended DOH:

• Verify the residency of members identified by a PARIS match who were not reviewed, as well as members identified as potentially residing outside of the state by other data sources, and recover improper premium payments where appropriate.
• Review the $299 million in premium payments for members whose eligibility was closed or not properly closed, and recover the payments where appropriate.
• Enhance processes to identify members living outside of the state and recover improper premium payments.

In their response, DOH officials generally concurred with the audit recommendations and indicated that it was already taking steps to address them. DOH agreed to explore the use of other data sources, including NCOA, to identify out-of-state members and engage with the federal government about incorporating data that helps establish residency into the PARIS matching process at the federal level.

Audit
Medicaid Program: Improper Premium Payments Made on Behalf of Managed Care Members Residing Outside the State