Colorado paid for dead people to receive health care, report alleges

Colorado Medicaid Overpaid Millions for Deceased Enrollees

A federal investigation has revealed that Colorado’s Medicaid program made over 220,000 payments to healthcare providers on behalf of individuals who had already passed away. this lapse in oversight resulted in an overcharge to the federal government of more than $6 million between 2018 and 2020.

A System-Wide issue

The Office of Inspector General (OIG) within the U.S. Department of Health and Human Services conducted a comprehensive audit, uncovering the critically important overpayment issue. The audit identified that Colorado made payments for healthcare services for nearly 9,000 deceased individuals who were still enrolled in the Medicaid program. The OIG utilized data from the Social Security Governance to pinpoint thes individuals,revealing a systemic problem within the state’s program.

While Colorado Medicaid officials maintain that the Social Security Administration data is unreliable,the audit highlights a critical need for robust data verification processes within the state’s Medicaid system. Auditors suggest that the lack of an automated system to verify death dates contributed to this misallocation of funds.

Fiscal Impact and State response

The OIG estimates that Colorado incorrectly paid out $3.8 million for deceased enrollees whose death dates were not recorded in the state’s system, and another $2.2 million for deceased enrollees whose death dates were correctly documented. this brings the total overpayment to $6 million.

“The OIG made six recommendations for improvement, including that Colorado reimburse the federal government $6 million,” the report states. This reimbursement includes $3.5 million for payments made to providers for deceased enrollees whose death dates were not in the state system and $293,890 for payments made for deceased enrollees whose death dates were recorded in the system.

Colorado officials, though, are disputing the findings and plan to negotiate with the federal centers for Medicare and Medicaid Services (CMS) rather than promptly repaying the amount. thay argue that the OIG’s methodology relies on questionable data sources and that states cannot solely rely on Social Security Administration death records due to known inaccuracies.

Despite the discrepancy, Colorado officials acknowledge the need to strengthen internal controls to verify death details and have already implemented several changes. They estimate that any potential payback to the federal government could take two to three years to negotiate.

A National Concern

Colorado is not alone in facing this issue. Previous audits have uncovered similar problems in 16 other states since 2016, underscoring the need for nationwide efforts to improve data accuracy and prevent inappropriate Medicaid payments.

This situation highlights the critical importance of robust data management systems and diligent verification processes within Medicaid programs across the country. Without such safeguards, millions of taxpayer dollars are at risk of being misallocated, depriving essential services to those who truly need them.

Q: Given the challenges and complexities of managing Medicaid programs, how can we, as a society, ensure that our most vulnerable populations receive the care they need without such considerable waste?

Interview with Marsha Honan, Colorado Medicaid Director

Archyde News recently sat down with Marsha Honan, the Director of Colorado’s Medicaid program, to discuss the recent findings of a federal audit that revealed millions of dollars in overpayments made to healthcare providers on behalf of deceased enrollees. Here’s what honan had to say about this critical issue and the state’s response.

обнаружениe оvеррayment and system-wide issues

Q: The Office of Inspector General’s audit found that Colorado Medicaid made over 220,000 payments totaling more than $6 million to healthcare providers for deceased enrollees between 2018 and 2020. Can you walk us through how such a important issue occurred within the system?

Marsha Honan: Sadly, this was a systemic issue that occurred due to inconsistencies in data management and verification processes. Our system lacked an automated mechanism to consistently updating death dates from reliable sources like the Social Security Administration. This lapse allowed for continued payments to providers for services rendered to deceased individuals.

Fiscal impact and State response

Q: The OIG estimates that Colorado needs to reimburse the federal government approximately $6 million. Though, Colorado officials plan to negotiate this amount with CMS. What’s the state’s leverage in these negotiations?

Marsha Honan: We understand the importance of recovering these funds, but we also need to ensure that we’ve accounted for all factors, including data inconsistencies and the known inaccuracies in some SSA records. We believe there’s room for negotiation based on these factors and our commitment to promptly addressing the systemic issues identified by the audit.

Q: Colorado has already implemented changes to strengthen internal controls and verify death details. Can you share any specific measures taken to prevent such overpayments in the future?

Marsha Honan: Absolutely. We’re now using a combination of data sources,including the SSA’s Death Master file,to continuously update and verify enrollees’ information. We’ve also implemented automated processes to flag and terminate enrollee eligibility in a timely manner upon receiving death reports.Additionally,we’re enhancing our provider education efforts to encourage them to promptly inform us of enrollees’ deaths.

National concern and potential solutions

Q: This isn’t the first time such an issue has surfaced. How can Medicaid programs nationwide prevent these overpayments, and what role can federal agencies play in supporting these efforts?

Marsha Honan: I believe robust, interoperable data systems are key. Federal agencies can support states by investing in improving data exchange capabilities and providing reliable, up-to-date death records. Standardizing and automating death reporting processes could substantially reduce these overpayments. Moreover, increased openness and shared learning among states could help us all address these issues more effectively.

Q: Given the challenges and complexities of managing Medicaid programs, how can we, as a society, ensure that our most vulnerable populations receive the care they need without such substantial waste?

Marsha Honan’s insights into Colorado’s approach to address the overpayment issue provide a glimpse into the challenges and solutions faced by Medicaid programs nationwide. As we strive to improve the efficiency and effectiveness of our safety net programs, understanding the nuances and complexities of these systems will be vital.