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The state Department of Health (DOH) could have saved the Medicaid program as much as $146 million over a six-year period if it had helped Medicaid patients with end stage renal disease (ESRD) who meet certain eligibility requirements get the Medicare benefits to which they are entitled, according to an auditreleased today by New York State Comptroller Thomas P. DiNapoli. Auditors estimate those efforts, if implemented, could save another $69 million from 2016 to 2018, which includes $17 million in savings for counties and New York City.

"New Yorkers dealing with kidney failure and struggling with day-to-day life should be informed of their Medicare eligibility, which could reduce their out-of-pocket expenses and may provide them with more options for care." DiNapoli said. "The state has an obligation not just to patients, but to taxpayers. With the looming uncertainty over Medicaid under the new administration in Washington, states need to take every initiative to defray Medicaid program costs."

Medicaid is a federal, state, and locally funded medical program that provides services to those who are economically disadvantaged or have special health care needs. The program is administered by DOH. For the fiscal year ended March 31, 2016, New York's Medicaid program had approximately 7.4 million enrollees and Medicaid claim costs totaled about $56 billion. The federal government funded about 53.2 percent of New York's Medicaid claim costs; the state funded about 30.6 percent; and localities funded the rest.

As noted in the audit, many of the state's Medicaid recipients are also eligible for Medicare. Medicare is the federal health insurance program for people who are age 65 or older, people under 65 who have certain disabilities, and, pursuant to a 1972 federal law, people with ESRD, the last stage of chronic kidney disease, if they meet mandated requirements.

DiNapoli's auditors determined DOH does not identify Medicaid recipients with ESRD, notify ESRD recipients of their entitlement to Medicare or take actions to help or encourage them to apply and enroll in Medicare. From Jan. 1, 2010 through Dec. 31, 2015, auditors determined there were 3,015 Medicaid recipients with ESRD who met the Medicare eligibility criteria, but who were not enrolled in Medicare when their medical services were provided. Had DOH informed the recipients about their entitlement to Medicare and taken steps to help get them enrolled, the Medicaid program could have saved as much as $146 million.

Based on an analysis of potential savings, auditors estimate the Medicaid program could save as much as $69 million more from 2016 through 2018 if DOH takes immediate steps to identify Medicaid recipients with ESRD and helps guide them on how to apply for and enroll in Medicare. In response to the audit, DOH initiated a project to identify Medicaid recipients diagnosed with ESRD and notify them that they may be eligible for Medicare and how to apply.

DOH can also obtain recoveries from Medicare (up to 12 months of an individual's medical costs) by tracking when ESRD recipients are retroactively enrolled in Medicare.

Sometimes a Medicaid recipient who is eligible for Medicare does not take steps to obtain Medicare coverage. To address this, the federal Social Security Administration (SSA) has a policy that allows Medicaid recipients who are age 65 and older and who are eligible for regular Medicare benefits to be enrolled without their consent. However, this policy does not address Medicaid recipients under age 65 who meet ESRD Medicare eligibility requirements.

Auditors requested that SSA clarify its policy related to authorizing automatic enrollment of Medicaid recipients diagnosed with ESRD, as long as they met ESRD Medicare requirements. This could allow Medicaid to pay ESRD recipients' Medicare out-of-pocket costs, such as premiums and coinsurance.

DiNapoli recommended DOH:

• Identify and notify Medicaid recipients with an ESRD diagnosis to apply for Medicare coverage and instruct them on how and where to apply;
• Develop an outreach program that encourages ESRD-related providers and others to inform ESRD recipients about Medicare benefits and Medicaid’s payment of Medicare out-of-pocket costs, and to actively assist recipients in applying for Medicare;
• Follow up with recipients who do not apply for Medicare by implementing a process that ascertains the Medicare eligibility of recipients diagnosed with ESRD and notifies the recipients of their apparent Medicare eligibility;
• If SSA clarifies or amends rules to allow the enrollment of ESRD recipients who do not apply for Medicare, collect and submit documentation required for SSA to make an ESRD Medicare eligibility determination for recipients who meet qualifying work credits; and
• Recover Medicaid claims paid for any retroactive Medicare enrollments of ESRD recipients.

DOH officials generally concurred with the audit recommendations and indicated that certain actions have been and will be taken to address them.

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