The Medicaid program in New York might have a pricey problem, to the tune of some $1.4 billion or more.

Modern Healthcare reports that the state paid out all that money to long-term care providers who didn’t abide by the state’s rules — and to top it off, the state failed to include language in its provider programs that would allow it to recover that money.

A federal report from the Office of the Inspector General found that numerous care providers failed to document patient assessments, provide community-based services or provide written care plans to patients. However, their contracts with the state obligated them to fulfill all these requirements.

And according to the OIG report, in fiscal 2014 the state may have forked over more than $1.4 billion to these providers. While the state could have gotten the money back, the contracts it executed with care providers lacked the appropriate language to allow it to recover payments from those who fail to meet their legal obligations. “This measure could have saved the Medicaid program $1.4 billion,” the OIG report says.

Not so fast, says New York.

While Jason Helgerson, New York Medicaid director, says that the state is working on improving its monitoring of care providers, he disagrees with the report’s broader conclusions — such as getting a return of funds of the size indicated in the OIG report.

Many items found not to be in compliance, he says, are simple paperwork problems — not something that would justify demanding providers to make full refunds to the state. Instead, he characterizes such an action as a “death penalty” and says the report’s figure of $1.4 billion in savings is “a complete mischaracterization.”

“They're suggesting that if any [provider] plan has any clerical error — if they have any deficiencies — we should recoup entire years of reimbursement,” Helgerson is quoted saying in the report. “If we were to basically ding them for a full year’s reimbursement, no one would ever sign that contract.”

Instead, he says the agency is examining the potential use of fines to keep providers toeing the line. “We want full compliance, but at the same time we have to have a measured response.”

Instant Insights /

NY Medicaid program has $1.4 billion problem -- or does it?

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