New York issued $7.6 million in improper Medicaid payments to incarcerated people

A federal audit by the U.S. Department of Health and Human Services Office of Inspector General found that New York made approximately $7.6 million in improper Medicaid managed care payments for incarcerated individuals. Between January 2021 and December 2024, these payments were made on behalf of 1,375 Medicaid enrollees who were in state prisons. The funds were distributed to managed care organizations rather than directly to the incarcerated persons. Of the total, the federal share amounted to $6.1 million.

The audit revealed that the state agency failed to consistently disenroll individuals from Medicaid managed care after receiving notification of their incarceration. In one instance, an individual remained enrolled for 23 months while imprisoned. While New York has systems to identify such recipients, auditors noted that these systems failed to consistently match incarceration and Medicaid records due to discrepancies in personal information like names and birth dates, as well as system limitations and pandemic-related overrides.

The Inspector General has recommended that New York return the funds to the federal government. New York officials stated that the state’s Office of Medicaid Inspector General is reviewing the payments and intends to recover any outstanding overpayments.