Medicare Improperly Paid Medicare Advantage Organizations Millions of Dollars for Unlawfully Present Beneficiaries for 2010 Through 2012

For calendar years 2010 through 2012, the Centers for Medicare & Medicaid Services (CMS) made $26.2 million in improper payments to Medicare Advantage (MA) organizations for approximately 1,600 unlawfully present beneficiaries. Specifically, CMS did not notify the MA organizations of the unlawful-presence information in its data systems. In the absence of such notification, MA organizations could not prevent unlawfully present beneficiaries from enrolling. For the same reason, MA organizations could not disenroll beneficiaries whose unlawful-presence status changed after they had enrolled.

In contrast to its fee-for-service (FFS) program, CMS did not have policies and procedures to notify the MA organizations of the unlawful-presence information in its data systems. Had CMS provided this information to the MA organizations, they would have been able to prevent enrollment and to disenroll beneficiaries already enrolled. CMS would then have been able to recoup any improper payments.

We recommended that CMS (1) recoup the $26.2 million in improper payments in accordance with legal requirements; (2) implement policies and procedures, consistent with those in effect under its FFS program, to notify MA organizations of unlawful-presence information and thereby prevent enrollment in MA organizations, disenroll beneficiaries already enrolled, and recoup any improper payments; and (3) identify and recoup improper payments made to MA organizations for unlawfully present beneficiaries after our audit period and until policies and procedures have been implemented that would ensure Medicare no longer pays for unlawful beneficiaries. CMS partially concurred with our recommendations.