Medicaid programs have made over $200 million in improper payments to health care providers for individuals who were already deceased, as reported by the independent watchdog of the Department of Health and Human Services. This finding highlights a systemic issue within the Medicaid system that has persisted across multiple states.
The Office of Inspector General (OIG) indicates that a forthcoming requirement from Republicans’ legislative package may mitigate these errors. This provision mandates states to audit their Medicaid beneficiary lists regularly, which could help reduce the incidence of payments made for deceased individuals in the future.
Aner Sanchez, an assistant regional inspector general in the Office of Audit Services, noted that the problem is widespread and not limited to a single state. He has been examining this issue for the past decade. The recent report revealed that more than $207.5 million was spent in managed care payments for deceased enrollees from July 2021 to July 2022.
To tackle this problem, the OIG recommends enhanced collaboration between the federal government and state agencies to recover these incorrect payments. One vital resource in this recovery effort is the Full Death Master File, a comprehensive database containing over 142 million records dating back to 1899. However, access to this file has been restricted due to privacy laws designed to protect against identity theft and fraud.
A recently enacted tax and spending bill signed into law by President Trump expands how the Full Death Master File can be utilized. The bill requires Medicaid agencies to perform quarterly audits comparing their provider and beneficiary lists against the database, starting in 2027. This initiative aims to prevent payments to deceased individuals and enhance the accuracy of Medicaid disbursements.
The report represents the first nationwide assessment of improper Medicaid payments. Since 2016, the OIG has conducted 18 audits of various state programs and discovered that approximately $289 million in managed care payments had been erroneously made on behalf of deceased enrollees.
Earlier this year, the government had some success in utilizing the Full Death Master File to mitigate improper payments. In January, the Treasury Department reported recovering over $31 million that had been mistakenly paid to deceased individuals during a five-month pilot program, facilitated by temporary access to the file granted as part of the 2021 appropriations bill.
Complicating these efforts, the Social Security Administration (SSA) has been making unexpected modifications to the file, including the addition and removal of records. For instance, in April, the Trump administration attempted to classify thousands of living immigrants as deceased and revoke their Social Security numbers as part of a crackdown on programs that granted them temporary residency under the Biden administration. This has further complicated the retrieval and usage of the Full Death Master File.
