DENVER — The Office of Inspector General alleges that the State of Colorado owes the federal government $6 million related to Medicaid funding that was reportedly spent on enrollees who were dead.
An audit conducted by the OIG found 127,874 payments were made on behalf of recipients who were listed as deceased by the Social Security Administration (SSA) but not listed as deceased in the state's system. Another 106,222 payments were reportedly made on behalf of recipients who were listed as deceased in the state's system at the time of the audit.
The OIG took a random sampling of 120 of the cases to determine how much federal funding was used. Based on that sample, the OIG estimated that Colorado spent $3.8 million in federal funds on deceased Medicaid recipients, while another $2.2 million was spent on other overreported costs.
In total, the OIG is asking the state to pay back $6 million to the federal government.
- Read the full audit below
In a statement, the Colorado Department of Health Care Policy and Financing (HCPF) said it does not plan on returning the money, alleging the OIG used an "inadequate approach" to reach the financial estimates in its report.
The HCPF denied the assumption that all members in the OIG's sample were actually deceased. The department said it is required by the Centers for Medicare & Medicaid Services (CMS) to perform "additional verifications" in order to determine whether a member is deceased.
"OIG disregards CMS’ direction that states cannot rely on the Social Security Administration (SSA) interfaces and other electronic data exchanges due to known errors in those interfaces. States must directly contact a member prior to terminating their eligibility due to death. The OIG did not independently perform such outreach to presumed deceased members, so the Department determines their work to be inadequate," the statement reads.
The HCPF also claims it has information showing that cases in the OIG's audit were closed for reasons other than death, including failure to respond and out-of-state residency.
- Read the full statement below
"The Dept. of Health Care Policy & Financing (Department or HCPF) does not plan to return the $6 million. 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.
The Department has many control processes to verify that individuals have died and is constantly working to enhance these controls. The Department disagrees with the OIG’s assumption that all members in their sample were actually deceased when identified by the OIG. The OIG uses data analysis of questionable sources rather than proving true verification of their findings. CMS expects the Department to perform additional verifications of questionable information in our eligibility system to determine whether the member is deceased. OIG disregards CMS’ direction that states cannot rely on the Social Security Administration (SSA) interfaces and other electronic data exchanges due to known errors in those interfaces. States must directly contact a member prior to terminating their eligibility due to death. The OIG did not independently perform such outreach to presumed deceased members, so the Department determines their work to be inadequate.
Additionally, the Department has furnished information to the OIG that demonstrates cases were closed due to reasons other than death such as failure to respond, residency out of state, etc. Case closures for reasons other than death may not result in capitation retractions. The Department cannot recover those capitations based on the OIG’s assumption that the member is deceased. The Department demonstrated its compliance in using information received from interfaces based on its Eligibility Verification Plan as required and approved by CMS. In addition, the Department demonstrated that some of the cases in the sample population did not receive death updates through SSA interfaces despite the OIG findings."
An OIG spokesperson said the office maintains that its audit methodology provided a reasonable conclusion and does not plan on revising its findings or changing the owed amount.
Any repayments will be coordinated through the Centers for Medicare & Medicaid Services (CMS). A final settlement could take two to three years to negotiate, according to the state.
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