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Department of Health and Human Services

Office of Inspector General -- AUDIT

"Medicaid Payments for Deceased Beneficiaries in Tennessee," (A-04-02-07020)

June 2, 2004

Complete Text of Report is available in PDF format (282 kb). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.


The objective of this audit was to identify Medicaid overpayments resulting from payments to providers for medical services claimed to have been rendered after beneficiaries' dates of death.  Our audit covered the period October 1, 1998 through September 30, 2001.  The Social Security Administration (SSA) maintains a comprehensive Death Master File on all reported deaths of people who have Social Security numbers.  This information is available to State and Federal agencies as a way to prevent payments for services claimed to have been rendered after a beneficiary's death.  Based on a statistically valid sample of 200 beneficiaries from the 66,416 beneficiaries who were enrolled in Medicaid during our audit period and listed on SSA's Death Master File, we estimated that claims paid for services after death totaled $5 million ($3.2 million Federal share).  The State paid claims for services after death and did not recover some overpayments because it (1) did not have a formal procedure to identify deceased beneficiaries or any overpayments made on their behalf, (2) had been abiding by the Tennessee attorney general's informal opinion which limited the recovery of overpayment to no more than 12 months after beneficiaries' deaths, and (3) did not have adequate controls to recover fee-for-service payments for services dated after beneficiaries' deaths.  We recommended that the State:  (1) review our sampling universe to identify and refund overpayments, which we estimated at $5 million ($3.2 million Federal share), made on behalf of deceased beneficiaries; (2) develop a formal procedure for identifying deceased enrollees to prevent overpayments made on their behalf; and (3) develop a policy to allow for the recovery of capitation and fee-for-service overpayments.