WASHINGTON – Senate Finance Committee Chairman Chuck Grassley (R-Iowa) sent a letter to Centers for Medicare & Medicaid Services (CMS) Administrator Seema Verma seeking information on Medicaid payments being made on behalf of deceased beneficiaries.
“Recent reports by two government watchdog agencies suggest that multiple state Medicaid agencies have made payments to managed care organizations for deceased individuals, and in some cases, the improper payments continued for as long as two years after the date of death,” Grassley wrote. “CMS can recoup the federal share of such payments in the event they are discovered, but almost a dozen reports by the Government Accountability Office (GAO) and the Office of Inspector General at the Department of Health and Human Services (OIG) suggest that multiple States struggle with this issue, and greater CMS leadership is needed to resolve it.
“I encourage the Centers for Medicare and Medicaid Services to expand its efforts to prevent, identify, and reduce payment risks, and enhance program oversight to eliminate fraudulent or improper Medicaid payments for ineligible individuals.”
Grassley is a leading voice on rooting out waste, fraud and abuse in the federal government. A significant portion of his oversight work focuses on the Department of Health and Human Services (HHS) and CMS.
Earlier this year, along with Sen. Pat Toomey (R-Penn.), Grassley blasted CMS for more than two decades of improper payments in the Medicaid program. In April, the Senate Finance Committee released a report finding Medicaid’s supplemental payments, which total approximately $50 billion in federal spending annually, often lack basic transparency and largely lack auditing tools to ensure taxpayer dollars are being spent appropriately or effectively. In July, Grassley highlighted a GAO report that found, among other things, in 15 states, Medicaid paid hospitals more than the total cost of care provided to Medicaid beneficiaries, resulting in inappropriately high Medicaid payments.
Text of the letter is available HERE and below.
Dear Administrator Verma:
I am writing today with concerns about Medicaid payments being made on behalf of deceased individuals. I encourage the Centers for Medicare and Medicaid Services (CMS) to expand its efforts to prevent, identify, and reduce payment risks, and enhance program oversight to eliminate fraudulent or improper Medicaid payments for ineligible individuals.
Recent reports by two government watchdog agencies suggest that multiple State Medicaid agencies have made payments to managed care organizations for deceased individuals, and in some cases, the improper payments continued for as long as two years after the date of death. CMS can recoup the Federal share of such payments in the event they are discovered, but almost a dozen reports by the Government Accountability Office (GAO) and the Office of Inspector General at the Department of Health and Human Services (OIG) suggest that multiple States struggle with this issue, and greater CMS leadership is needed to resolve it. These GAO and OIG reports also underscore the importance of enhanced program oversight by CMS as well as greater collaboration and cross-checking of data by State officials.
For example, in 2015, GAO compared the beneficiary and provider identity information shown in Medicaid claims data from four selected States to the Social Security Administration’s full Death Master File (DMF). Using this comparison method, GAO determined that payments were made by these four states on behalf of at least 200 individuals who were deceased, and these unallowable payments totaled at least $9.6 million in calendar year 2011 alone.
More recently, GAO issued a report criticizing CMS for insufficient guidance to State agencies and for gaps in program integrity oversight that “are inconsistent with federal control standards, as well as CMS’s goals… [.]” GAO indicated last year that “CMS is missing an opportunity to develop more robust program integrity safeguards that will help mitigate payment risks in Medicaid managed care.” One such payment risk described by GAO in its 2018 report is payments to managed care organizations for deceased beneficiaries and other ineligible individuals.
The HHS OIG also has conducted selected audits of Medicaid payment records in recent years, and these audit reports (which were released after CMS’s rule was finalized in 2016) identified over $200 million in unallowable capitation payments to managed care organizations on behalf of the deceased. The reason that State officials are not dis-enrolling beneficiaries after their dates of death, the OIG concluded, often is because State Medicaid agencies are not cross-checking beneficiary records against death records kept by other agencies in their own State or other States. (GAO’s 2018 report explains that stakeholders found that this problem is fueled by insufficient staffing, high staff turnover, and lack of expertise in information technology, on the part of State Medicaid agencies.) To illustrate:
Finally, at least four State auditors also have reported millions of dollars in unallowable Medicaid capitation payments to managed care organizations for the deceased. For example, a fiscal year 2018 audit by Rhode Island’s Auditor General attributed $11 million in such improper payments to “system and operating deficiencies” that “impacted the timely termination of Medicaid eligibility upon death which resulted in capitation payments being made for ineligible individuals.” The Louisiana Legislative Auditor, in a 2017 audit, found that the state Department of Health “paid $637,745 in improper capitation payments to managed care organizations for 203 deceased Medicaid recipients over a 4-year period.”
Such strikingly similar findings from multiple State audits and OIG audits over the past three years perhaps point to a wider problem than CMS has previously acknowledged. Assuming, as seems likely, that States other than those subject to these selected audits also made Medicaid payments for deceased individuals, the total amount of improper payments by all States may exceed the roughly $250 million that State and Federal government auditors have identified to date. Furthermore, unless OIG audits are routinely conducted of every State Medicaid agency (or unless CMS is doing its own program oversight to annually verify each State’s compliance with 42 CFR § 438.3(c)(2)), some payments for the deceased may not come to light or be recovered by the taxpayers.
The problem of improper payments for the deceased likely is not unique to the Medicaid program, and might have been anticipated by CMS where, as here, the HHS OIG previously identified a similar issue in its 2013 report on the Medicare program. That earlier audit report, which detected unallowable payments for deceased Medicare beneficiaries dating back to 2009, led the OIG to recommend that CMS institute reforms.
CMS should institute reforms to prevent, rather than simply recoup, wasteful Medicaid payments. For example, CMS should revisit and possibly upgrade its existing tools for preventing Medicaid fraud, waste, and abuse. The agency should identify new tools, in addition to its most recent informational bulletin to help States identify providers or managed care organizations that submit high numbers of improper Medicaid claims that received managed care payments from states for the deceased. CMS also should promote the adoption of protocols or policies to ensure that State Medicaid agencies can quickly and efficiently compare Medicaid payment claims against death records kept by other State or Federal agencies.
To this end, please provide the following information no later than October 18, 2019.
Thank you for your attention to this important matter. If you or your staff have any questions, please contact Evelyn Fortier or Rachael Soloway of my Committee staff at (202) 224-4515.