NY Identifies $496 Million in Home Health Medicaid Error Payments

The state of New York has recovered more than $200 million from the federal government after identifying more than twice that amount in payment errors related to home care beneficiaries who are dually eligible for Medicare and Medicaid. 

The N.Y. Department of Health’s Fiscal Group received a $211 million payment representing the state’s share of the $496 million in identified erroneous Medicaid payments—the single-largest monetary recovery in the Office of the Medicaid Inspector General’s history.

This recovery is part of the Third-Party Liability Home Health Care Demonstration Project, a federal program that looks at dual eligible beneficiaries receiving home health care services, conducted in conjunction with the University of Massachusetts Medical School. 


Home health care providers are supposed to bill Medicare first for dual eligibles, and then Medicaid for whatever Medicare hasn’t covered. 

“As in most cases, Medicaid is the payer of last resort for dual-eligible recipients,” Medicaid Inspector General James C. Cox explained in a statement.  “In the cases reflected in these overpayments, bills for these home health care patients were inadvertently sent to Medicaid before first sending them to Medicare and following the correct process.  Through the demonstration project, we were able to prove that Medicaid was overcharged and recover the money.”

Prior to the project, each dual eligible case where an erroneous claim was suspected was examined on claim-by-claim basis. Using a 200-case claim sample of dual eligible claims, OMIG and the University of Massachusetts Medical School staff were able to create a system calculating payments that New York’s state Medicaid program had made that should have first been made by Medicare. 


New York’s monetary recovery reflects project efforts between 2007 and 2010. 

“The administrative burden posed by the claim-by-claim approach had been enormous,” Cox added. “The extrapolation and sampling technique are standard processes used in professional auditing, and it makes sense that we were able to employ this technique to achieve the success of this project. This is tremendous news for New York.” 

Written by Alyssa Gerace