A new audit of the Texas Medicaid system revealed that $5.5 million was paid out to managed care organizations (MCOs) between January 2013 and December 2015 for beneficiaries already deceased.

The report, conducted by the Department of Health and Human Services Office of Inspector General (OIG), comes on the heels of previous OIG work finding that states had made Medicaid fee-for-service and capitation payments for deceased beneficiaries.

Under federal law, a capitation payment is “a payment the State agency makes periodically to a contractor on behalf of each beneficiary enrolled under a contract for the provision of medical services under the State plan. The State agency makes the payment regardless of whether the particular beneficiary receives services during the period covered by the payment.”

According to the audit, 8,496 capitation payments were made during the period studied, and while some of those payments on behalf of deceased beneficiaries were recovered, $1.7 million in unallowable payments have not been.

Another $840,587 was paid for beneficiaries for which the OIG could not determine deceased status.

The audit determined that “the State agency had inadequate policies and procedures to identify deceased beneficiaries through its monthly death reviews,” and recommended that the state both recover the unallowable funds and strengthen its safeguards to prevent similar erroneous payments.

Salvador Ayala

Sal is the Budget & Policy Analyst for Empower Texans. He has been a committed proponent of American founding principles since 2007, shortly after receiving his J.D. from Chicago-Kent College of Law. Before joining Empower Texans, he served as legislative director for Rep. Matt Rinaldi in the Texas house and was a delegate to the 2012 RNC. In his leisure, Sal enjoys live music, digital photography, guitar, bicycling, trivia, and documentary films.