State Medicaid agencies have made an estimated $289 million in improper capitation payments to managed care organizations on behalf of deceased enrollees since 2016, according to a series of audits from the HHS Office of Inspector General.
The latest OIG audit, released Dec. 23, estimates Medicaid agencies made $207.5 million in unallowable capitation payments to MCOs for enrollees whose deaths preceded the monthly service periods during fiscal year 2022. The audit covered payments from July 2021 to June 2022 across 35 states, Washington, D.C. and Puerto Rico.
Five notes:
- Of the 100 sampled capitation payments, 99 were made after the enrollee’s death. Half of the overpayments had already been recovered by Medicaid agencies before the OIG flagged them, with the remaining 49 either not recovered or recovered only after the OIG notified states.
- The most common reason for errors were that Medicaid agencies’ data sources did not include the enrollee’s date of death, which accounted for 29 of the 49 unrecovered payments. Another 14 payments involved cases where the death information was available through other sources but had not been entered into the state’s Medicaid system.
- The One Big Beautiful Bill Act requires all states to check the Social Security Administration’s Death Master File at least quarterly starting January 1, 2027, to identify deceased Medicaid enrollees and discontinue payments on their behalf.
- The OIG recommended CMS provide Medicaid agencies with matched enrollment and death data so states can review capitation payments and recover unallowable amounts. CMS agreed and said it would share OIG’s data with the affected states. The OIG also recommended CMS work with states to implement the new OBBB requirements.
- The latest audit is the OIG’s 19th audit on the issue since 2016. The Senate Finance Committee flagged the issue in 2019, noting that multiple states continue to struggle with identifying deceased enrollees despite CMS’s ability to recoup federal funds when overpayments are discovered.
