Maryland Medicaid pays dead people During FY 2011, Maryland spent $7.7 billion (about half of it from the federal government) on approximately 959,000 Medicaid recipients. Medicaid represents about a fifth of the entire state budget and is one of Maryland’s fastest rising costs. A just-released performance audit offers a snapshot of bureaucratic inertia by Maryland’s Department of Human Resources, which establishes Medicaid eligibility requirements, and the Department of Health and Mental Hygiene, which is responsible for its management. But mismanagement is a more appropriate term for a state agency that paid $7.5 million in Medicaid benefits to 532 dead people.
Auditor Bruce Myers of the state’s Office of Legislative Audits pointed out that the Social Security Administration’s Death Master File contains information on some 89 million people who have died, collected from a variety of sources. The list is updated monthly. Although SSA admits that the DMF database is not 100 percent accurate, its error rate of one-quarter of one percent is as accurate as it gets for government work.
Auditors discovered the $7.2 million in overpayments when they simply checked Maryland’s list of eligible Medicaid recipients against the DMF using only the recipient’s Social Security number, date of birth and the first three letters of their last name. Drilling deeper into 20 cases, they found that $426,403 in postmortem Medicaid benefits had been paid to just 10 deceased individuals, nine of whom were enrolled in managed care organizations. In one case, Medicaid payments to a nursing home began eleven months after the individual had died. Despite the high probability of fraud, auditors noted with classic understatement that “the results of our match suggest that the Departments’ existing processes are not always effective.” No kidding.
Not only did Maryland officials fail to access the DMF database, they also ignored status changes recorded on their own Client’s Automated Resource and Eligibility System, which also had information on patient deaths. DHR also failed to verify that “individuals approved for Medicaid benefits were Maryland residents.” One Virginia resident who “planned to move to Maryland” but never did, received Maryland Medicaid benefits at an out-of-state address, and the checks were not canceled until a year and a half after her death. With Gov. Martin O’Malley and state legislators once again considering raising taxes on working people, such sloppiness is inexcusable.
