A recent report from the Health and Human Services (HHS) Office of Inspector General (OIG) reveals troubling evidence of improper Medicaid payments amounting to over $207.5 million for deceased individuals. This staggering figure, covering a period from July 2021 to June 2022, contributes to a larger pattern of issues that have resulted in total improper payments of $289 million since 2016.
This report underscores the need for vigilant oversight in the Medicaid program. According to the OIG, the center of this challenge lies in improper capitation payments—monthly payments to managed care organizations (MCOs) for services not rendered to deceased enrollees. The OIG states that out of 100 statistically sampled payments, 99 were made incorrectly. This raises serious concerns about the integrity of the payment processes in place.
In light of these findings, new legislation known as the “One Big Beautiful Bill Act,” signed into law earlier this year, aims to enhance accountability in the system. It expands access to the Social Security Full Death Master File and mandates quarterly audits starting in 2027. As announced by Rep. Scott Perry, focusing on fraud detection should not come at the expense of those who rely on these crucial health programs. He emphasized that while the current administration has pledged to protect beneficiaries, efforts to eliminate fraud have not been adequately addressed.
The OIG’s detailed report cites, “we estimate that Medicaid agencies made $207,501,380 ($138,645,710 Federal share) in unallowable capitation payments” to MCOs related to individuals who had already passed away. This financial mismanagement has evidently persisted despite previous audits indicating similar patterns of abuse. The OIG has conducted 18 audits since 2016, revealing that approximately $289 million in capitation payments were made improperly for deceased enrollees.
Interestingly, the OIG’s findings indicate that some of these overpayments have been recovered, highlighting the capacity for rectifying mistakes. However, the unrecouped payments present a significant concern. The audit reveals that while efforts were made to recover some funds, the same cannot be said for others, signaling potential gaps in the oversight mechanisms.
To tackle these ongoing issues, the report urges the Centers for Medicare and Medicaid Services (CMS) to do more. Suggested actions include sharing data from the Transformed Medicaid Statistical Information System (T-MSIS) with relevant agencies. With better data access, these agencies can revisit capitation payments, recover unallowable funds, and work towards preventing future payment errors.
The systemic challenges outlined in the OIG report serve as a wake-up call. Much is riding on the effective execution of the new legislation and recommendations. If implemented properly, there is potential for significant savings that could better serve those who rely on Medicaid—a critical program for many Americans.
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