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CMS's Policies and Procedures Were Generally Effective in Ensuring That Prescription Drug Coverage Capitation Payments Were Not Made After the Beneficiaries' Dates of Death

The Centers for Medicare & Medicaid Services (CMS) had policies and procedures in place that were generally effective in ensuring that capitation payments to Medicare Advantage organizations' prescription drug plans and stand-alone prescription drug plans (collectively referred to as "sponsors") for Medicare Part D coverage were not made on behalf of deceased beneficiaries after the individuals' dates of death. These policies and procedures generally ensured that CMS did not make improper capitation payments on behalf of deceased beneficiaries when its data systems indicated at the time of a monthly capitation payment that the beneficiaries in question had died.

CMS did not, however, identify and recoup all improper capitation payments. Specifically, as of March 7, 2017, CMS had not recouped $1.1 million associated with 65,398 separate capitation payments. For our audit period, these improper payments represented .0004 percent of the total capitation payments made to sponsors and .097 percent of the total adjustments that CMS made after receiving information on beneficiaries' dates of death.

We recommended that CMS use the information in this report to recoup the $1.1 million in capitation payments to sponsors for Medicare Part D coverage on behalf of deceased beneficiaries. We also recommended that CMS continue to implement system enhancements to identify, adjust, and recoup improper capitation payments in the future. CMS concurred with both of our recommendations and described corrective actions that it had implemented.

Filed under: Center for Medicare and Medicaid Services