The state of Indiana paid at least $1.1 million in 2016 and 2017 to managed-care organizations on behalf of Hoosier Medicaid beneficiaries who were dead, according to a new federal audit of Indiana’s Medicaid program.
The 15-page report, released last week by the U.S. Department of Health and Human Services inspector general, is the 10th to expose payments made by various states, including Illinois, to managed-care organizations for medical coverage to no longer living individuals.
For Indiana, HHS audited $1.3 million in spending during the two-year period that went toward 1,746 monthly capitation payments, which are contracted amounts the state pays per beneficiary to managed-care organizations, regardless of whether the person uses any medical services during the month.
It found after matching Indiana Medicaid enrollment data to various public and private death records that the state’s repeated failure to fully process death notifications in its enrollment system led to the $1.1 million in improper payments on behalf of deceased Hoosiers.
At the same time, even when Indiana Medicaid properly recorded a date of death, monthly capitation payments to managed-care organizations continued in some cases, according to the audit.
Indiana Medicaid Director Allison Taylor said in a written response included in the audit that the state agrees with the findings and will implement all the HHS recommendations to remedy the errors.
That includes recouping the $1.1 million in dead-member payments from managed care organizations, refunding the $862,097 federal share of that spending, identifying additional dead-member payments outside the audit period and refunding the federal share. It also includes ensuring dates of death consistently are added to the state’s Medicaid enrollment system.
Taylor has served as state Medicaid director since May 2017 after previously working as general counsel for the Indiana Family and Social Services Administration.
The audit period spanned the final year of Republican Gov. Mike Pence’s administration and the first year of Republican Gov. Eric Holcomb’s tenure.
An August 2019 audit of Illinois’ Medicaid program for the October 2015-September 2017 period found Illinois paid $4.6 million to managed care organizations on behalf of deceased beneficiaries.
Following the audit, Illinois Medicaid Administrator Doug Elwell likewise pledged to recoup the improper payments, refund the federal share, and modify the state’s systems to ensure beneficiary deaths are properly recorded and subsequent payments on their behalf halted.
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