* 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.