Medicare paid claims for deceased, undocumented immigrants

Medicare has paid millions in claims for deceased beneficiaries and undocumented immigrants, a government investigation has found.

The Department of Health and Human Services' Office of the Inspector General (OIG) found that in 2011, Medicare improperly paid $23 million in claims for deceased patients to providers, suppliers, Medicare Advantage organizations, and prescription drug plan sponsors.

Part C, Medicare Advantage, accounted for the bulk of those payments, about $20 million, the OIG found, while Part A and B accounted for about $2.5 million and Part D accounted for about $1 million.

The Centers for Medicare & Medicaid Services has a number of processes in place to prevent such overpayments, but they haven't been preventing all improper payments, the OIG noted. For Medicare medical and hospital coverage, in April 2011 CMS started an "informational unsolicited response" system,
retroactively adjusting certain paid claims when subsequent claims or actions suggest it was mistakenly reimbursed.

For Parts C and D, CMS automatically disenrolls individuals from their Medicare Advantage or prescription drug plans upon their death.

Among other recommendations, the OIG is suggesting that CMS consider legal action when necessary to recoup improper post-death payments from providers, Medicare Advantage issuers or Part D sponsors.

The OIG also found that CMS " inappropriately accepted" 279,056 prescription drug event records from Part D sponsors covering undocumented immigrants in 2011, totalling almost $29 million for drug costs between 2009 through 2011.

The OIG's review found that 279,056 drug benefit claims were made on behalf of 4,139 undocumented immigrants.

In the large part, the OIG said, CMS made the mistaken payments to undocumented immigrants, who aren't eligible for most federal health programs, because it had no system to distinguish them from all other beneficiaries.

"CMS did not have a policy addressing payments for unlawfully present beneficiaries under Medicare Part D that was equivalent to the existing policy that covers payments for these beneficiaries under Parts A and B," the OIG wrote.

The HHS watchdog is recommending that CMS resolve the improper Part D payments and develop and implement controls to automatically reject claims by non-lawful residents.