The Federal Government Adds an Additional $23 Million to New York State’s Medicaid Bill

  • Oct 27 2014

As far as the Federal government is concerned, it appears that New York is running up quite a bill in claimed overpayments to its Medicaid program.  After finding the State liable for nearly $1.26 billion in overpayments related to intermediate care facilities operated by the Office for People with Developmental Disabilities (“OPWDD”), the United States Department of Health and Human Services (“HHS”) is now looking to add another $23 million to the tab.

In its September, 2014, report, the HHS Office of Inspector General (“HHS-OIG”) alleged that some Medicaid claims for supported employment services did not comply with Federal and State requirements, resulting in $23,054,993 in Federal overpayments to New York’s Medicaid Program.

Supported employment services provide developmentally disabled New Yorkers with the tools and support necessary to perform in a work setting.  These services, offered through two home- and community-based services waiver programs (OPWDD and Bridges to Health waivers) must meet several Federal and State requirements to receive reimbursement.

HHS-OIG’s report states that New York made claims for unallowable services because providers did not ensure that:

  1. Services claimed were properly billed as supported employment services;
  2. Supported employment services were provided only to beneficiaries with completed and approved care and supported employment plans;
  3. Supported employment services were adequately documented;
  4. Supported employment services were claimed at the appropriate level-of-support billing rate;
  5. Beneficiaries’ assessments and level-of-care evaluations were documented; and
  6. Beneficiaries were not eligible for similar services through the New York State Education Department.


While the New York State Department of Health agrees that its waiver programs need improvement to ensure compliance with Federal and State regulations, it did take issue with a majority of the report’s findings and questioned the alleged overpayment amount.  HHS, however, is standing firm on the matter and will continue to seek repayment from New York State.

It is unclear what the next chapter in this saga will be.  As of this post, New York is still waiting for a determination from the HHS Secretary regarding reconsideration of the billions of dollars identified as overpayments this summer.

This article was written by Kathleen Evers.  For more information, please contact David R. Ross, who served as Acting New York State Medicaid Inspector General under governors Pataki and Spitzer, as well as General Counsel, Deputy Medicaid Inspector General, and Director of Audits and Investigations for the Office of the Medicaid Inspector General (OMIG).  He can be reached at (518) 462-5601 or via e-mail at

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Posted in: HHS OIG, Medicaid



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