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Aiming at the wrong target

Friday, May 30, 2014

* This headline is completely, utterly bogus

Audit: $12.3M in Illinois Medicaid benefits paid to dead people

First of all, Medicaid doesn’t pay patients. Medicaid pays providers. And that’s just what happened here, which you’ll finally see after you scroll down several paragraphs

The vast majority of the overpayments — $11.4 million — went to managed care organizations, that is, the private insurance companies with contracts to pay for health care for the poor and disabled. The state pays monthly [capitation] fees to those companies on a per-patient basis, rather than paying doctors and hospitals a fee for each separate service.

* To be sure, however, this was most definitely a supremely massive oversight failure by DHFS. From the audit

We determined that many of the individuals were signed up for managed care months after their date of death. For individuals with Title XIX eligibility in fiscal year 2013, of the 993 individuals whose date of death was more than 60 days prior to the payment date, we identified 561 who were enrolled in managed care and had capitation services paid on their behalf more than 90 days after their date of death. The average number of days they were signed up after their date of death was 663.

Due to the fact that these individuals were deceased, the State in most cases was not paying for any fee-for-service expenses for these individuals after their date of death. However, once the Department enrolled these 561 deceased individuals into managed care, the State began paying their monthly premiums, which totaled $6.96 million through October 1, 2013. The highest monthly rate paid was $5,384. [Emphasis added.]


An accompanying chart shows managed care payments on behalf of people who’d been dead more than 60 days were about $50,000 a month back in July of 2011, but shot way up to almost $900,000 a month by October, 2013.

Plain and simple, DHFS dropped the ball.


* From the agency’s audit response

Because capitation payments for individuals enrolled in managed care are made prospectively and the Department may not be immediately notified of an individual’s death, Department policy provides for recoupment of improper payments for deceased individuals from managed care companies.

As deaths are recorded in Department systems, the information is automatically processed to deduct up to 18 months of overpayments for deceased individuals from future payments. […]

As of February 10, 2014, 98% of the 993 people associated with the capitation overpayments identified in this audit have been properly coded as deceased in Department systems. The Department has recouped or is in the process of recouping the $11.4 million in capitation overpayments under managed care that were identified in this audit. The Department expects all overpayments to be recouped by year’s end.

OK, fine, but fix the darned problem.

- Posted by Rich Miller        

  1. - anon - Friday, May 30, 14 @ 10:51 am:

    There are equal parts understaffing, incompetence, and arrogance at that agency. Seriously, the staff has a significant work burden that is made more difficult by the whims of the general assembly (whether its negating contracts entered into by the department, or passing legislation that requires new coverages without matching appropriations). HFS needs more people to do its job effectively. With that said, some of the senior staff at HFS are so arrogant that even if this problem was brought to their attention, they would have ignored it because they have things “under control.” The things that are slipping through the cracks over there is obscene.

  2. - VanillaMan - Friday, May 30, 14 @ 10:52 am:

    The buckets we use are filled with leaks. So what we do is use paper Dixie cups to catch the water leaking from the buckets and when these fill, we empty them back into the buckets.

    Last year we spent $15,000,000 on Dixie cups.

  3. - Anon. - Friday, May 30, 14 @ 11:01 am:

    Cue the jokes about how many of these decedents continued to vote.

  4. - Anonymous - Friday, May 30, 14 @ 11:22 am:

    ==Cue the jokes about how many of these decedents continued to vote.==

    Well they were going to vote, but not now for the guy who just slashed their health care!

  5. - Eastsider - Friday, May 30, 14 @ 11:27 am:

    Does anyone in this discussion understand how capitation works? From the comments I’m guessing no.

  6. - Anyone Remember - Friday, May 30, 14 @ 11:36 am:

    Does anyone have headcount figures for the relevant HFS units from before the ERI to the current date?

  7. - JustMe_JMO - Friday, May 30, 14 @ 12:50 pm:

    Just how hard is it to allow access to the State’s Death database?

    “A project manager has been hired to enforce contract milestones” was there a prior manager? If so were the fined / fired?

  8. - wordslinger - Friday, May 30, 14 @ 12:55 pm:

    The headline is embarrassing, but it’s not surprising.

    I’ve come across a fair amount of people who believe Medicaid beneficiaries get checks in the mail.

  9. - Formerly Known As... - Friday, May 30, 14 @ 1:58 pm:

    A 663 day gap is unacceptable at any level.

  10. - Anon. - Friday, May 30, 14 @ 2:25 pm:

    ==Does anyone in this discussion understand how capitation works?==

    In the US constitution, it means a “head tax,” that is, a tax that is the same amount on every taxable human being. Does that help?

    If it means a system where the health care provider gets paid a certain amount per patient ccvered by a plan, regardless of services provided, how does that help to justify showing people as continuing to be covered and paying for them for an average of nearly two years after they died?

  11. - Federalist - Friday, May 30, 14 @ 5:26 pm:

    Why am I not surprised that much of the media is even more unaware than many of us and keep posting such dumb headlines.

    Will they ever learn? Probably not!

Sorry, comments for this post are now closed.

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