Review of Payments to Medicare Managed Care Risk Plans for Deceased Beneficiaries

This final report points out that the Health Care Financing Administration (HCFA) paid $3.1 million to health maintenance organizations (HMO) for beneficiaries who were deceased. Although HCFA had recouped $1.2 million of the improper payments, $1.9 million remains outstanding due to both HCFA not being aware of all the deaths and its lack of action to collect some identified overpayments. We recommended that HCFA recover the $1.9 million erroneously paid and make immediate system corrections to prevent continuing annual overpayments of $250,000 to HMOs for the identified deceased beneficiaries. The HCFA generally concurred with our recommendations. After issuance of our draft report to HCFA, we continued work in this area and identified an additional $1.1 million in payments for beneficiaries who died subsequent to the cut-off date of our initial review. We are recommending that HCFA also take action to recover these additional overpayments.