A breaking report from the HHS Office of Inspector General revealed over $207.5 million in improper Medicaid managed care payments for deceased enrollees from July 2021 to June 2022, part of broader issues totaling $289 million since 2016.
For context, OIG noted that the “One Big Beautiful Bill Act,” signed into law by President Trump earlier this year, expands access to the Social Security Full Death Master File and mandates quarterly audits starting in 2027 to reduce this waste. A separate analysis estimated $1.1 trillion in federal Medicaid improper payments over the past decade. Rep. Scott Perry highlighted targeting fraud without affecting beneficiaries.
Reacting to this explosive report, Aner Sanchez, the assistant regional inspector general in the Audit Office, explained that “these types of improper payments are ‘not unique to one state, and the issue continues to be persistent.’”
Similarly, Rep. Scott Perry (R-PA), the former Freedom Caucus chairman, noted, “On Medicare and Medicaid, the president has said we’re not going to touch those programs from a beneficiary standpoint, but what he’s never said is we’re not willing to touch those programs from a fraud standpoint.”
According to the original OIG report, “We estimate that Medicaid agencies made $207,501,380 ($138,645,710 Federal share) in unallowable capitation payments to MCOs for enrollees whose date of death, as recorded by the Social Security Administration’s Death Master File, occurred before the monthly service periods covered by the capitation payments during our audit period (July 1, 2021, through June 30, 2022).”
Providing more information on this data, the official document noted, “This estimate is based on the results of our review of 100 statistically sampled capitation payments. We determined that Medicaid agencies made unallowable capitation payments after enrollees’ deaths for 99 of the 100 sample payments.”
Explaining why the document was created, the office noted, “Since 2016, OIG has conducted 18 audits identifying that Medicaid agencies had improperly made roughly $289 million ($202 million Federal share) in capitation payments on behalf of deceased enrollees.”
"*" indicates required fields
Offering some more context, the report read, “However, for 50 of those unallowable capitation payments, we found that Medicaid agencies recovered the overpayments before we provided them with the sample capitation payments for their review.”
Still not done, the report stated, “The remaining 49 capitation payments were either not recovered or recovered after we sent the Medicaid agencies the sample capitation payments for their review. As a result of these unallowable and not previously recovered payments, we estimated $207,501,380 ($138,645,710 Federal share) in unallowable capitation payments for our audit period.”
Wrapping up the document, I made several suggestions to close this gaping hole in the vital program. “That [Centers for Medicare and Medicaid Services] provide the Medicaid agencies covered by our audit with our matched T-MSIS data so that those agencies can review the capitation payments and take appropriate action to recover any unallowable payments.”
They also suggested that CMS “Explore opportunities to work with Medicaid agencies to ensure that provisions of the OBBB Act are properly implemented. This effort could result in yearly estimated savings of $207,501,380.”