OIG Tells Texas Stop Paying Medicaid MCOs For Dead Patients

Texas has agreed to take steps to redress and prevent future Medicare capitation payments to Medicare managed care organization organization in response to an audit by the Department of Health & Human Services Office Of Inspector General (OIG).

A recently released OIG report says OIG found Texas Medicaid did not always stop making capitation payments after a beneficiary’s death, despite its efforts to identify and recover any unallowable payments. Specifically, Texas Medicaid paid $6.4 million for 8,496 capitation payments made between January 1, 2013, and December 31, 2015, for beneficiaries with death dates reported as prior to this period. While Texas recovered some of these payments, OIG determined that $1.8 million remains unrecovered and that Texas paid $840,587 for beneficiaries who OIG could not determine to be deceased.

Based on these findings, OIG recommended that Texas Medicaid:

  • Identify and recover unallowable payments totaling $1.8 million from MCOs and refund $1 million (Federal share) to the Federal Government,
  • Review capitation payments before and after the OIG audit period for additional unallowable payments for the deceased beneficiaries,
  • Work with the Social Security Administration to determine whether the 77 beneficiaries whose status could not be verified are deceased and recover any unallowable payments, and
  • Strengthen its policies and procedures for identifying deceased beneficiaries and denying Medicaid benefits and ending eligibility to prevent future unallowable payments. Texas Medicaid agreed with our findings and provided information on actions that it had taken or planned to take to address OIG’s recommendations.

The report and Texas’ response sends a strong signal to Texas and other Medicaid managed care organizations to clean up their eligibility tracking and billing to avoid billing for or accepting capitation payments after beneficiaries die as well as prepare to make repayments if they receive those payments.

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