OIG: Medicare improperly paid millions to incarcerated beneficiaries

Hands clutching prison bars

The federal government paid an estimated $34.6 million in improper Medicare payments for incarcerated patients over two years, an Office of Inspector General investigation found.

Not only did the Centers for Medicare & Medicaid Services fork out millions in potentially improper payments in 2013 and 2014, OIG said in its report, but it still hasn’t tried to determine whether any of the claims should have been denied. It found that CMS:

  • Didn’t have policies and procedures in place allowing it to detect and recoup improper payments after the fact. CMS turned off its post-payment claims edit, OIG said.
  • Planned policy and procedure revisions that didn’t comply with Medicare requirements.
  • Won’t be able to recoup the $34 million-plus in improper claims because it will be using incomplete data that won’t identify all the payments.

OIG recommended that CMS develop and implement a data collection system that complies with Medicare requirements, review the suspect 2013 and 2014 claims to recoup improper payments, and identify and recoup subsequent improper payments for incarcerated beneficiaries.

CMS said it planned to reinstate its post-payment claims edit last month to identify and recoup overpayments, but said implementing the recommended data collection system would duplicate work done by the Social Security Administration to identify incarcerated beneficiaries.

OIG acknowledged some duplication was possible, but noted that problems will continue otherwise because the SSA and Medicare have different timelines for how long incarcerated beneficiaries should be denied benefits.

In a 2014 report, OIG criticized CMS for paying Part D Medicare drug expenses for incarcerated patients. And in 2015, an OIG report said that from 2009 to 2011, CMS made more than $33 million in payments to nearly 12,000 incarcerated beneficiaries, all of which the agency was unable to recoup.