The State Comptroller’s Office made a last-minute budget request to expand its workforce that audits the Medicaid program — a team it says has identified billions in savings from a bloated state program.
First Deputy Comptroller Pete Grannis sent a memo to budget officials in early January requesting an addendum to the office’s upcoming fiscal plan. The Comptroller’s Office asked for an additional $5 million to hire 10 new Medicaid auditors to identify waste and potential savings in the nearly $100 billion program. Half of the program’s costs are eligible for federal funding.
Grannis’ justification for the additional funding is what he calls a “massive” return on investment. The comptroller’s team of roughly 50 auditors has identified $10.5 billion in Medicaid overspending in the last five years and provides guidance to state health officials on how to prevent or recover wasted funds. More than $8 billion in Medicaid claim errors, overpayments or missed rebates come from the last three years alone, according to documents shared with Crain’s.
Considering that the costs of running the Medicaid audit program are around $5 million a year, the program produces more than a $400 return on investment for every dollar spent, Grannis said.
“The work that these auditors do hugely benefits the state’s bottom line,” Grannis said. “These are taxpayer dollars and they could be put to better use.”
The governor’s office did not respond to an inquiry from Crain’s on Friday about whether or not it plans to include the request from the Comptroller’s Office in its final budget.
The Comptroller’s request for more auditors comes as state officials warn of growing costs in the Medicaid program. New York’s Medicaid spending grew 11% in the last year, growing to around $35 billion. Total costs of the program are nearly $100 billion, including federal and local funds.
“The program has exploded,” said John Kaehny, executive director of government watchdog group Reinvent Albany. “It’s now the biggest single thing that New York spends money on.”
Given that Medicaid is the biggest part of the state’s budget, “there should be a heck of a lot of people in government looking at how effective different Medicaid programs are, auditing them, and trying to keep them as effective as they can be,” Kaehny said.
Grannis said that most of the Medicaid program’s waste comes from Health Department errors, such as missed rebates from drug companies or overpaid hospital claims. The office is finalizing an audit identifying more than $1.5 billion in overpayments to managed care organizations over roughly four years, including payments to providers who weren’t enrolled in Medicaid.
Grannis said that the Comptroller’s Office did not include the workforce line item in its initial budget request because it was asked to submit a flat fiscal plan for 2025. The Comptroller’s Office does not get back any of the savings — all savings are potential that could be observed by the Health Department.
The Comptroller’s Office is not responsible for recovering any of the funds overspent on Medicaid, but makes recommendations on how health officials can prevent or get back funds that have been overspent.
Amanda D'Ambrosio , 2024-03-25 10:33:04
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