Medicare agency prepaid for dead

The Associated Press
Saturday May 12, 2001

WASHINGTON — Over the past decade, the government paid a total of $4.1 million to cover future medical costs for patients who had already died, government inspectors said Friday. 

The Health Care Financing Administration made the payments to health maintenance organizations on patients’ behalf even though Medicare listed the beneficiaries as dead, the Department of Health and Human Services Inspector General said. 

The Medicare agency paid premiums for roughly 200 people who had died between 1991 and 1999, the report said. 

The main Medicare database listed the patients as dead, but a smaller HHS database of HMO participants didn’t always square the deaths with the master Medicare database, the report said. 

The report said $3.2 million of the misdirected funds are still outstanding, but officials at the Health Care Financing Administration said they have recovered $4 million to date. 

And the agency has improved its matching of records, officials said. 

“The most recent monthly run of our utility shows no payments made for deceased beneficiaries,” Michael McMullan, acting deputy administrator of HCFA, told the inspector general’s office. 

Officials said they also expect to recover money paid for patients who had died but were not listed in the report. 

Medicare provides health insurance for 40 million elderly and disabled Americans. Most payments are reimbursements made to doctors and hospitals for Medicare’s share of approved patient services. 

In a program designed to attract HMOs to the program, Medicare pays the health plans a set monthly rate per person to deliver medical services.  

About 5.6 million seniors are served by more than 170 health plans nationwide, HCFA officials said. 

The report studied the four states, Arizona, California, Colorado and Florida, with the highest market saturation; 43 percent of the seniors served by HMOs getting such payments live in those states. 


The report said an unidentified plan in California received $330,957 from 1991 through October 2000 for dead beneficiaries. 

Inspectors say the discrepancies were noticed in routine regional checks on the HMO program. The report does not assign any blame to the HMOs that receive payments from Medicare. 

Health plan officials said they support efforts to make sure payments are accurate and adequate. 

“To that end this report highlights why regulatory reform and reform of HCFA should be an integral part of any Medicare modernization effort,” said Phil Blando, a spokesman for the American Association of Health Plans. 

Last month, investigations by HHS and Congress showed that felons and fugitives received millions of dollars in Medicare benefits, despite federal laws prohibiting most of them from receiving the health benefit. 


On the Net: 

Health Care Financing Administration: http://www.hcfa.gov/ 

Health and Human Services Inspector General: http://www.dhhs.gov/progorg/oig/