New York state was able to recover $46 million in overpayments to nursing homes after an audit by State Comptroller Thomas P. DiNapoli found the Department of Health’s (DOH) computer system failed to deduct payments some nursing home residents are required to pay for their care, according to a follow-up report issued today by DiNapoli. The new report, however, notes that deficiencies in the computer system still exist.

“Over and over again, my auditors are finding poor oversight of payments and other big problems that have led to tens of millions of dollars of waste in the Medicaid program each year,” DiNapoli said. “While DOH worked with the Office of the Medicaid Inspector General to recover these overpayments, there is much more that needs to happen to prevent the payments from occurring in the first place. Until DOH fully implements my recommendations and puts new controls in place, there is significant risk that overpayments to nursing homes will continue.”

Medicaid recipients with income from Social Security, pensions or other sources are required to pay for some of the cost of their nursing home care. The amount they pay is known as net available monthly income, or NAMI. New York’s county social service offices and the Human Resources Administration in New York City are responsible for determining NAMI amounts for their Medicaid nursing home recipients.

Localities are also responsible for updating DOH’s Medicaid claims processing system (eMedNY) with recipients’ NAMI. During claims processing, eMedNY deducts NAMI from the amount that Medicaid pays each month to nursing homes. From Jan. 1, 2007 through Aug. 31, 2010, eMedNY paid nursing homes $26.6 billion after deducting $3 billion of NAMI.

In an initial report issued in September 2011, DiNapoli’s auditors determined Medicaid made $42 million in overpayments to nursing homes during the audit period. The eMedNY system failed to deduct NAMI from nursing home claims whenever a provider excluded the first day of the month from its claim, resulting in $34.5 million in overpayments. Medicaid overpaid nursing homes an additional $7.5 million because localities were not determining and updating NAMI timely.

The Office of the Medicaid Inspector General (OMIG) investigates and recovers improper Medicaid payments on behalf of DOH. With a consultant’s assistance, OMIG analyzed DiNapoli’s findings, and at the time of the follow-up, had recovered $30 million in overpayments and expected to recover another $16 million in overpayments.

Still, auditors found DOH had not implemented controls that would properly apply NAMI towards the cost of nursing home care going forward and urged DOH to do so.

DiNapoli, as part of his responsibilities to audit state payments, has expanded an ongoing Medicaid audit initiative that has found approximately $1.68 billion in waste, fraud and abuse, including about $120 million in 2013.

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