Review of Medicare Managed Care Capitation Payments for Deceased Beneficiaries

This final report points out that the Health Care Financing Administration (HCFA) paid $4.1 million to managed care organizations (MCOs) for deceased beneficiaries in 4 States (Arizona, California, Colorado, and Florida). These 4 States represent about 43 percent of all Medicare risk-based enrollees. The HCFA has recouped about $833,000, but over $3.2 million remains outstanding because HCFA was not aware of all of the deaths and did not take action to collect some of the improper overpayments. Further, HCFA continues to pay at least $700,000 per year to MCOs for the deceased beneficiaries identified by our review. We recommended that HCFA identify and recoup Medicare payments in all States made on behalf of deceased beneficiaries, including the $3.2 million identified in this report. We also recommended that HCFA continue to strengthen procedures to prevent and detect payments to MCOs for deceased beneficiaries. The HCFA concurred with our recommendations.