Michigan Claimed Improper Medicaid Reimbursement for Some Medicare Part B Premiums

The Michigan Department of Community Health (DCH) claimed Federal Medicaid reimbursement for some Medicare Part B premiums it paid on behalf of beneficiaries who were ineligible for the buy-in program. Participating State Medicaid agencies are allowed to pay the monthly Medicare Part B premiums for certain Medicaid beneficiaries who are entitled to both Medicare and Medicaid benefits. The premium payments are made in cooperation with the Centers for Medicare & Medicaid Services (CMS) under what is known as the "buy-in program." A State may claim Medicaid reimbursement for the Federal share of the Medicare Part B premiums it paid for eligibly enrolled individuals.

Of the 100 beneficiaries we randomly selected for review, 85 were eligible for enrollment in the buy-in program, and the Medicare Part B premiums that DCH paid on their behalf were allowable. The remaining 15 beneficiaries were ineligible for the buy-in program, and the Medicare Part B premiums that DCH paid on their behalf were unallowable. On the basis of our sample results, we estimated that DCH improperly claimed at least $517,000 (Federal share) in Medicare Part B premiums it paid for individuals ineligible for enrollment in the buy-in program for the quarters ended December 31, 2008, through March 31, 2010. In addition, for the quarters ended December 31, 2007, through September 30, 2008, DCH claimed $232.8 million ($139.5 million Federal share) for Part B premiums it paid on behalf of beneficiaries it could not readily identify nor document as eligible for the buy-in program.

We recommended that DCH (1) refund $517,000 (Federal share) to the Federal Government for improper Part B premiums claimed; (2) strengthen coordination efforts with DHS, CMS, and Social Security Administration officials to ensure appropriate corrective action is taken in verifying changes reported in a beneficiary's eligibility status; and (3) work with CMS to determine the allowability of the $139.5 million (Federal share) in Part B premiums claimed for Medicaid reimbursement for which DCH had inadequate support and refund any unallowable amount claimed. DCH disagreed with our findings and recommendations.