Federal watchdog reports Medicaid made over $200 million in payments on behalf of deceased individuals in 2021 and 2022
Medicaid programs issued over $200 million in incorrect payments to healthcare providers from 2021 to 2022 for services attributed to deceased individuals, a new report from a federal independent watchdog states.
However, the Department’s Office of Inspector General indicated that a new rule in the Republicans’ One Big Beautiful Bill, which mandates states to review their Medicaid enrollment lists, could potentially curb such erroneous future payments.
“These improper payments are not confined to a single state, and the problem remains ongoing,” Aner Sanchez, assistant regional inspector general in the Office of Audit Services, informed The Associated Press. Sanchez has studied the issue for ten years.
The report released Tuesday found that more than $207.5 million in managed care payments were processed for deceased enrollees from July 2021 to July 2022. It advises the federal government to enhance data sharing with states to recoup the funds, including providing access to a comprehensive database called the Full Death Master File, which holds over 142 million records dating to 1899.
Access to the Full Death Master File has been heavily limited by privacy statutes designed to prevent identity theft and fraud.
A major tax and spending legislation enacted by President Donald Trump this summer broadens the permissible uses of the Full Death Master File. It requires Medicaid agencies to conduct quarterly audits of their provider and beneficiary rosters against the file starting in 2027, aiming to halt payments to the dead and enhance data precision.
This Tuesday’s report marks the first comprehensive national examination of improper Medicaid payments. Since 2016, the HHS inspector general has performed 18 audits of various state programs, identifying roughly $289 million in improper managed care payments made on behalf of deceased beneficiaries.
Earlier this year, the government saw positive results from using the Full Death Master File to block improper payments. In January, the Treasury Department announced it recovered funds wrongly sent to deceased persons during a five-month pilot program. This was possible after Congress granted Treasury temporary three-year access to the file as part of the 2021 appropriations bill.
At the same time, the Social Security Administration has been applying atypical revisions to the file, inserting and deleting records, which hinders its utility. For example, in April, the Trump administration took action to cancel the Social Security numbers of certain immigrants as part of a crackdown on individuals who had been permitted temporary U.S. residence under programs initiated during the Biden administration.