Federal Audit Finds Florida Pays Medicaid MCOs for Dead People, Demands Recoupment

The Office of Audit Services of the HHS-OIG released a report today that they found Florida’s Agency for Health Care Administration was paying state MCOs their capitation rate for deceased Medicaid beneficiaries.  They estimated that “these overpayments amount to approximately 2 percent of the $1.3 billion that the State agency paid to MCOs from July 1, 2009, through November 5, 2014, on behalf of deceased Medicaid beneficiaries.”  They want $15.2 million to be repaid to the federal government.

Similar experience in Texas

Considering our recent stories on Texas managed care organizations, this federal report certainly is timely.  It is also reminiscent of the stated report done by an outside consulting firm of Texas Medicaid in 2010.  They found that “the Medicaid demographic file they reviewed had a list containing forty-eight eligible Medicaid beneficiaries over the age of 115; these ranged from 116 to a high of 196. Implausibly, they found 11,641 Medicaid beneficiaries to have a recorded age above 99 years.”

Here is the executive summary of the federal report on Florida.

Florida’s Agency for Health Care Administration (State agency) did not always stop making capitation payments after a beneficiary’s death, despite its efforts to identify and recover any overpayments. Of the 124 capitation payments in our random sample selected from payments to beneficiaries whose dates of death (DODs) preceded the payment date, the State agency recovered 10 payments prior to the start of our audit and 1 was not recoverable. For the remaining 113 capitation payments, the State agency made overpayments totaling $192,000 ($112,000 Federal share). During the course of our audit, the State agency adjusted 34 of the 113 payments totaling $64,948. On the basis of our sample results, we estimated that the State agency made overpayments to managed care organizations (MCOs) totaling $26.2 million ($15.4 million Federal share) during our audit period. These overpayments amount to approximately 2 percent of the $1.3 billion that the State agency paid to MCOs from July 1, 2009, through November 5, 2014, on behalf of deceased Medicaid beneficiaries.

These overpayments occurred because the State agency did not (1) timely update the DODs in the Florida Medicaid Management Information System (FMMIS), and the beneficiaries’ enrollments were not updated once they were identified as deceased and (2) collaborate with other State and Federal agencies to determine the inconsistency between the sources of DODs or use additional sources or alternative procedures to determine the reason its data sources were inconsistent.

We recommended that the State agency (1) identify and recover overpayments totaling $26.2 million from MCOs and refund $15.4 million (Federal share) to the Federal Government; (2) perform monthly reviews of FMMIS records to ensure that beneficiaries with DODs are removed from the Florida Statewide Medicaid Managed Care Program; (3) implement policies and procedures for identifying and correcting inaccurate death information received through its sources of death data, specifically ensuring that differences in the DODs between the FMMIS and incoming death records are quickly resolved; and (4) improve its collaborative efforts with the Social Security Administration, the Department of Children and Families, and Florida’s Bureau of Vital Statistics to identify and resolve inconsistencies in recipient information such as DODs and social security numbers.

The State agency did not indicate whether it agreed or did not agree with our recommendations; nevertheless, it stated that it recovered almost $24 million of the $26 million in overpayments that we identified and described steps that it has taken or planned to take to implement our four recommendations.

Copies can also be obtained by contacting the Office of Public Affairs at Public.Affairs@oig.hhs.gov.

Download the complete report.