Series: MCO Payments for Services After Beneficiaries' Deaths

The State agency made unallowable capitation payments after enrollees’ deaths. For 53 of the 100 capitation payments in our sample, the State agency made unallowable capitation payments totaling $102,867 ($71,751 Federal share). For 44 of the remaining capitation payments in our sample, the capitation payments were allowable, but the State agency erroneously linked the enrollees’ Medicaid records to deceased enrollees. We could not fully confirm that the remaining 3 enrollees associated with 3 of the 100 capitation payments were deceased.

Based on our sample results, we estimated that Delaware made unallowable capitation payments totaling at least $4.2 million (over $3.4 million Federal share) to MCOs on behalf of the 409 deceased enrollees during our audit period. Additionally, linking living enrollees to deceased individuals’ Social Security Numbers (SSNs) could have led to enrollees being mistakenly disenrolled, which would have caused a delay or denial of services.

Delaware made unallowable capitation payments on behalf of deceased enrollees because it did not have adequate processes in place to enable it to identify deceased enrollees. Further, Delaware incorrectly aligned the SSNs of deceased individuals with living enrollees due to data entry errors and inadequate supervisory oversight of the data entry process.

• We estimate that Medicaid agencies made $207,501,380 ($138,645,710 Federal share) in unallowable capitation payments to MCOs for enrollees whose date of death, as recorded by the Social Security Administration’s Death Master File, occurred before the monthly service periods covered by the capitation payments during our audit period (July 1, 2021, through June 30, 2022).
• This estimate is based on the results of our review of 100 statistically sampled capitation payments. We determined that Medicaid agencies made unallowable capitation payments after enrollees’ deaths for 99 of the 100 sample payments. However, for 50 of those unallowable capitation payments, we found that Medicaid agencies recovered the overpayments before we provided them with the sample capitation payments for their review. The remaining 49 capitation payments were either not recovered or recovered after we sent the Medicaid agencies the sample capitation payments for their review. As a result of these unallowable and not previously recovered payments, we estimated $207,501,380 ($138,645,710 Federal share) in unallowable capitation payments for our audit period.

Colorado made unallowable capitation payments to MCOs on behalf of deceased enrollees, whose dates of death preceded the service periods covered by the monthly capitation payments. Specifically:

• Of the 120 capitation payments in our stratified random sample, 109 payments were made on behalf of deceased enrollees whose dates of death preceded the service period covered by the monthly capitation payment.
• We also identified almost 39,000 unallowable capitation payments that Colorado made on behalf of deceased enrollees even though their dates of death were accurately recorded in the State’s eligibility system.

Accordingly, we estimated that Colorado made at least $3.8 million (Federal share) in unallowable capitation payments to MCOs on behalf of deceased enrollees. In addition, Colorado incorrectly reported other Medicaid expenditures to CMS totaling over $2.2 million (Federal share).