Medicare Improperly Paid Providers Millions of Dollars for Unlawfully Present Beneficiaries Who Received Services During 2009 Through 2011

While Federal law permits Medicare payments for services rendered to an alien who is lawfully present in the United States, Medicare benefits are not allowable for aliens who are not lawfully present. If a Medicare claim was processed after the Centers for Medicare & Medicaid Services' (CMS) data systems indicated that a Medicare beneficiary was unlawfully present in the United States, CMS was able to prevent the payment. However, when CMS's systems did not indicate the unlawful presence status until after a claim had been processed, CMS was not able to detect and recoup the improper payment.

Because CMS did not always receive the unlawful presence information promptly, Medicare payments totaling $91.6 million were made to health care providers (providers) for services to approximately 2,600 unlawfully present beneficiaries during calendar years 2009 through 2011. CMS did not have policies and procedures that would have enabled it to detect such improper payments after the payments were made. Consequently, CMS did not notify its payment processing contractors (Medicare contractors) to recoup any such payments.

We recommended that CMS (1) ensure that Medicare contractors recoup the $91.6 million in improper payments, (2) implement policies and procedures to detect and recoup improper payments made for Medicare services rendered to unlawfully present beneficiaries when unlawful presence information is received on previously paid Medicare claims, and (3) identify improper payments made on behalf of unlawfully present beneficiaries after our audit period but before implementation of policies and procedures and ensure that Medicare contractors recoup those payments. CMS generally concurred with our recommendations and stated that in April 2013 it plans to implement a process for detecting and recouping improper payments for previously paid Medicare claims. CMS also noted that it must take into account the cost benefit of recoupment activities.