California Medicaid Managed Care Organizations Received Capitation Payments After Beneficiaries’ Deaths

California made capitation payments after beneficiaries’ deaths. Of the 184 capitation payments in our random sample, 6 payments were correct. For the remaining 178 payments, California made unallowable payments totaling $433,948 ($302,755 Federal share). Despite California’s efforts to identify and recover unallowable payments, some (29 percent) of these unallowable payments occurred more than 1 year after the beneficiaries’ deaths, but the remaining (71 percent) unallowable payments occurred during the first year after the beneficiaries’ dates of death.

The unallowable payments occurred because California did not: (1) disenroll beneficiaries after their dates of death were identified during data interface between the eligibility system and the California Death Master file; (2) collaborate with the California Department of Public Health to identify inconsistencies between dates of death and other data (like Social Security Numbers); or (3) regularly use additional sources or alternative procedures to identify, verify or determine dates of death.

On the basis of our sample results, we estimated that California made unallowable payments totaling $70.9 million ($53.4 million Federal share) to MCOs during our audit period.

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