Medicaid Agencies Made Millions in Unallowable Capitation Payments to Managed Care Organizations on Behalf of Deceased Enrollees
Learn how the AI-generated research projects were createdOverall Conclusion
We estimate that Medicaid agencies made $207,501,380 ($138,645,710 Federal share) in unallowable capitation payments to MCOs for deceased enrollees during the audit period (July 1, 2021 – June 30, 2022).
Source Document
Audit Scope
Reviewed 409,862 net Medicaid capitation payments of $50 or more totaling $408,465,511 ($263,335,398 Federal share) made during the audit period to MCOs in 35 States, Puerto Rico, and Washington, DC, on behalf of deceased enrollees whose date of death preceded the service period covered by the capitation payment.
Key Findings Summary
Extrapolating from 49 capitation payments, the estimated total unallowable capitation payments were $207,501,380 ($138,645,710 Federal share).
Medicaid agencies made unallowable capitation payments after enrollees’ deaths for 99 of the 100 sample capitation payments.
Fifty of those unallowable capitation payments were recovered before we provided the sample payments for review; the remaining 49 were either not recovered or recovered after review.
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AI-Assisted
AI Scope Summary
This audit quantified the nationwide scope of unallowable capitation payments to Medicaid managed care organizations for deceased enrollees during July 2021 through June 2022, using a stratified sample of 100 payments across 27 Medicaid agencies, extrapolating to a total of 409,862 payments and $408.5 million in net capitation payments, resulting in an estimated $207.5 million in unallowable payments.
AI-Generated Insight
This audit highlights persistent vulnerability in Medicaid capitation payments to MCOs for deceased enrollees, emphasizing the need for robust DMF/T-MSIS data matching and quarterly death records checks under the OBBB Act; findings support CMS and state-level actions to recover overpayments and strengthen controls.
Audit Objectives
Our objective was to determine a nationwide estimate of Medicaid capitation payments made to MCOs on behalf of deceased enrollees.
Audit Findings (4)
Extrapolating from 49 capitation payments, the estimated total unallowable capitation payments were $207,501,380 ($138,645,710 Federal share).
Medicaid agencies made unallowable capitation payments after enrollees’ deaths for 99 of the 100 sample capitation payments.
Fifty of those unallowable capitation payments were recovered before we provided the sample payments for review; the remaining 49 were either not recovered or recovered after review.
The unallowable payments occurred for the following reasons: 29 capitation payments lacked the enrollee’s date of death in the death data sources; 14 capitation payments did not have the DOD in MMIS but DOD was available via other sources (e.g., SOLQ or vital statistics); 4 capitation payments had DOD in MMIS consistent with DMF but eligibility was not updated after death; 2 capitation payments had DOD inconsistencies where MMIS DOD was after DMF DOD.
Recommendations (2)
Provide Medicaid agencies covered by the audit with OIG's matched T-MSIS data so they can review capitation payments and recover unallowable payments for enrollees whose date of death preceded the service period.
Explore opportunities for CMS to work with Medicaid agencies to ensure proper implementation of the One Big Beautiful Bill Act (OBBB Act), potentially resulting in annual savings.