Minnesota's Department of Human Services overpaid an estimated $3.7 million for deceased Medicaid beneficiaries, according to an October report from the Department of Health and Human Services inspector general.
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Now the inspector general recommends the state's Department of Human Services refund $3.2 million to the federal government — something department commissioner Jodi Harpstead did not seem to agree with in September.
The audit covered more than 6,000 payments between Jan. 1, 2014, and Dec. 31, 2016, for individuals reported as deceased. It looked at capitation payments, which cost a set amount for each enrolled patient whether he or she seeks health care or not.
"Of the 100 capitation payments in our random sample, Minnesota made 95 unallowable payments totaling $62,665," the report's authors wrote.
Why did Minnesota overpay so much? The audit looked at a period of time during which the state was transitioning to a new eligibility and enrollment system that had issues with the system that processed payments to managed care organizations.
"These problems have since been fixed and other procedures have been added to avoid making such payments in the first place, and to identify and recover more quickly when these payments occur," Harpstead wrote in a Sept. 13 letter to Sheri Fulcher, regional inspector general for audit services at HHS.
"Ensuring our records are up-to-date so we do not pay for individuals who are no longer receiving care is a continual challenge. We gather death information from many different sources, which do not always report in a timely manner."
In response to the inspector general's recommendation that the department refund the federal government more than $3.2 million for the period covering 2014 to 2016, Harpstead said the final refund was not likely to match that figure because it "was extrapolated from the sample of 100 capitation payments."
She also pointed out that the audit covered a period of time during which a total of $15.4 billion in payments were made.
"Ensuring our records are up-to-date so we do not pay for individuals who are no longer receiving care is a continual challenge. We gather death information from many different sources, which do not always report in a timely manner. Because these payments are made to health plans in advance we will always have to reconcile accounts. We are using continuous process improvement, including periodic data match, to get payment accuracy rates as close to 100 percent as possible to be trustworthy to taxpayers," the state Department of Human Services told FOX Business.
The HHS office of the inspector general investigated Minnesota's Department of Human Services because other states had made similar blunders. 2019 audits of Illinois and California prompted the inspector general to recommend the states return millions to the federal government — $3.2 million from Illinois and a whopping $53.4 million from California.