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Audit (A-07-07-01046)

03-04-2009
Review of Medicare Payments to Managed Care Plans on Behalf of Deceased Enrollees

Executive Summary

In a review of Medicare payments to Medicare Advantage organizations on behalf of deceased enrollees, we found that CMS paid approximately $4.4 million for coverage periods after the enrollees' months of death. Medicare Advantage organizations provide managed care to enrollees under Medicare Part C. Pursuant to Federal regulations, after an enrollee dies, the last allowable payment is for the month in which the enrollee died. CMS made improper payments for 2,657 of the approximately 1.7 million deceased enrollees (far less than 1 percent of the enrollees who died) between January 1, 2003, and April 30, 2007. Although CMS had correctly stopped payments for the vast majority of the deceased enrollees, its systems did not identify and prevent all improper payments.

We recommended that CMS recoup the $4.4 million in unallowable payments and implement system enhancements to prevent and detect improper payments in the future. CMS responded that it had already recovered $3.5 million and would not recover the remainder, primarily because of limited resources. CMS separately provided detailed descriptions of its procedures to prevent and detect improper payments. We revised our second recommendation after reviewing the procedures but continue to recommend that CMS recoup the full $4.4 million.

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