Medicaid Agencies Made Millions in Unallowable Capitation Payments to Managed Care Organizations on Behalf of Deceased Enrollees

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.

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.