UnitedHealthcare and Amerigroup paid $6.6 million in improper and questionable Medicaid physician payments in New York, according to an audit by the state comptroller.
New York State Comptroller Thomas DiNapoli criticized UnitedHealthcare and Amerigroup, the Anthem subsidiary, for making limited efforts to recover more than $6.6 million in improper payments, including $60,000 they paid to pharmacies for medications that had been prescribed by deceased providers.
Managed-care organizations may not be working hard enough to recoup those improper payments, the comptroller's office said, noting that the companies' managed care organizations may have disincentives to recover the funds because they are factored into premium rate calculations and can lower premiums in the future.
Empire Blue Cross and Blue Shield of New York, which previously did business as Amerigroup, said it takes any report of waste, fraud and abuse seriously, and it will continue to work with the comptroller to make improvements.
The office made 11 recommendations to the state's Department of Health, including calling on the regulator to analyze whether recoveries have affected premium rates and require managed-care organizations to boost their investigation staffs.
New York's Department of Health agreed with some of the comptroller's recommendations, but maintained that the managed-care landscape had significantly changed during the audit time frame, and regulators already have several new protections in place to prevent waste, fraud and abuse.
In particular, the Department of Health criticized the comptroller for making overarching categorizations of managed-care organizations even though it only audited two organizations, saying the findings could be inaccurate or misleading.
Back in 2014, the Government Accountability Office released a scathing report about managed-care insurers, calling on the CMS to require states to audit payments that involve private Medicaid insurers. Since then, several states including California, New Jersey, Rhode Island and Washington have uncovered improper and questionable managed-care organization payments. Rhode Island revealed that it had overpaid UnitedHealthcare and Neighborhood Health Plan by $208 million and started recouping those erroneous payments.
The New York State Comptroller's office said that it has several other managed-care organization audits underway and planned more for the future.
In April, the Obama administration issued a final rule that amps up Medicaid managed-care oversight with additional audits.
Managed care made up approximately half of New York's Medicaid budget in 2014, and the comptroller's office says that could rise to 90% or higher in 2016, thanks to federal and state pushes to shift care models.
