Audit: Millions paid to deceased Medicaid members
According to the audit report, Colorado pays Medicaid managed care organizations (MCOs) for health care services provided to Medicaid enrollees; in return, MCOs receive a monthly fixed payment for each enrollee (capitation payment). The OIG said the audit was initiated due to previous audits revealing other states making improper payments on behalf of deceased enrollees.
According to the OIG's findings, Colorado made capitation payments to MCOs on behalf of deceased enrollees:
Of the 120 capitation payments in a random sample, 109 payments were made on behalf of deceased enrollees whose dates of death preceded the service period covered by the monthly capitation payment.
Almost 39,000 unallowable capitation payments were made by the State of Colorado on behalf of deceased enrollees even though their dates of death were accurately recorded in the State's eligibility system.
The OIG said it estimates Colorado made at least $3.8 million in unallowable capitation payments to MCOs on behalf of deceased enrollees. In addition, the OIG said Colorado incorrectly reported other Medicaid expenditures to the Centers for Medicare & Medicaid Services (CMS) totaling over $2.2 million. The OIG recommended that Colorado refund the estimated $6 million to the federal government.
In a statement from the Colorado Department of Health Care Policy & Financing (HCPF),
'The Department of Health Care Policy & Financing (HCPF) has many control processes to verify that individuals have died and is constantly working to enhance these controls,' the Department said in its statement. 'HCPF disagrees with the OIG's assumption that all members in their sample were actually deceased when identified by the OIG.'
HCPF went on to argue that the OIG used 'data analysis of questionable sources' and said it would be performing its own verification of the eligibility system, as the OIG did not independently perform outreach to deceased members' families to ensure the results were accurate.
In addition, HCPF said it has sourced information to the OIG showing some cases were closed due to reasons other than death such as failure to respond, residency out of state, etc.
'HCPF does not plan to return the $6 million,' the Department went on to state. 'Based on the OIG's inadequate approach in reaching the financial estimates in this report, HCPF will need to spend time disputing the estimates directly with the Centers for Medicare, Medicaid Services (CMS), rather than attempting to identify and recover unallowable capitation payments made to our Managed Care Organizations solely based on the OIG report. If there was to be any kind of pay back, any final settlement with CMS will take 2-3 years to negotiate.'
Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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