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Medicaid Paid Benefits to the Dead: Incompetence or Fraud?  

INDIANA  

The state of Indiana paid some $1.1 million in Medicaid-related payments  in  2016 and 2017 to managed-care organizations (MCO) on behalf of  beneficiaries who were dead, according to federal auditors reported by  the United States Department of Justice.  The audit, carried out by the Department of Health and Human Services  Office of Inspector General (OIG) and released on February 13, 2020  revealed that in a random sample of 100 so-called capitation  disbursements made to MCOs, the state of Indiana \\u201cmade 95 unallowable  payments.\\u201d  The Office of the Attorney General found:  Indiana made capitation payments on behalf of deceased beneficiaries. We  confirmed that 70of the 71beneficiaries associated with the 100  capitation payments in our stratified random sample were deceased. Of  the 100 capitation payments, Indiana made 95 unallowable payments  totalling $79,403 ($58,773 Federal share). On the basis of our sample  results, we estimated that Indiana made payments totalling at least $1.1  million ($862,097 Federal share) to MCOs on behalf of deceased  beneficiaries during our audit period.  Indiana did not always fully process Medicaid beneficiaries\\u2019 death  information in the MMIS. Although the State agency\\u2019s eligibility systems  interfaced with Federal and State data exchanges that identify dates of  death, the State agency did not enter the dates of death in the MMIS  for 48 of our sampled beneficiaries. Additionally, the State agency did  not recover the capitation payments for 22 sampled beneficiaries that  did have a date of death in the MMIS.  The organizations that received the unlawful payments are part of the  Medicaid Managed Care health care delivery system.  Medicaid agencies and managed care organizations (MCOs) that accept a  set per member per month (capitation) payment for these services,\\u201d the  Medicaid program site states. MCOs use capitation payments to manage  health care costs, utilization, and quality.  The OIG concluded that the State agency made capitation payments on  behalf of deceased beneficiaries. OIG confirmed that 70 of 71  beneficiaries associated with the 100 capitation payments in our sample  were deceased. Of the 100 capitation payments, the State agency made 95  unallowable payments totalling $79,403 ($58,773 Federal share).  The State agency did not recover any of the 95 sampled capitation  payments. On the basis of the sample results, the DOJ estimated that the  State agency made payments totalling at least $1.1 million10($862,097  Federal share) to MCOs on behalf of deceased beneficiaries for service  dates during the audit period.  Yet aspects of the system have been plagued by problems, with the  Indiana report coming on the heels of others that similarly found that  some states had improperly paid capitation payments on behalf of the  deceased.