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Medicare Pays $23M in Dead Claims

 |  By cclark@healthleadersmedia.com  
   November 04, 2013

A federal investigation finds that although CMS has safeguards to prevent and recover Medicare payments made on behalf of deceased beneficiaries, claims have slipped through and been paid.

Medicare reimbursed providers and suppliers $23 million for healthcare services to beneficiaries in 2011, despite the fact that those beneficiaries had died more than a month earlier, according to an Office of Inspector General's report issued Oct. 31.

The Centers for Medicare & Medicaid Services "has safeguards to prevent and recover Medicare payments made on behalf of deceased beneficiaries," the agency said. "However, it inappropriately paid $23 million [less than one-tenth of a percent of total Medicare expenditures] in 2011 after beneficiaries' deaths. Part C (Medicare Advantage plans) accounted for 86% of these improper payments," or $19,906.805 for 11,835 deceased beneficiaries.

Part A claims submitted for dates of service (hospital, home health, skilled nursing facility, and/or hospice care) after beneficiaries' dates of death totaled $1.634,280 for 193 deceased beneficiaries.

Claims under Part D, which covers prescription drugs, with dates after death amounted to $1,049.444 for 5,101 beneficiaries. And claims under Part B, for physician and non-physician fees, amounted to $592,823 for 1,541 beneficiaries who had died by their dates of service.

Another 11% were flagged because of missing or incorrect dates of death.

The agency said 251 providers and suppliers had exceptionally high numbers of paid or unpaid claims with service dates after beneficiaries' deaths under Medicare Part B, which includes physician services and durable medical equipment.

Attempts to obtain reimbursement sometimes came many months to more than a year after the patient died. For example, for Part B claims, 63 providers submitted claims for electrocardiogram reports for 30 beneficiaries with an average lag time of 403 days after the beneficiary died, according to the report.

CMS undertook take these actions recommended by federal investigators:

  1. Improve existing safeguards to prevent future payments for services dated after beneficiaries died.
  2. Take appropriate action on improper payments and correct inaccurate dates of death.
  3. Monitor paid and unpaid Part B claims with service dates after beneficiaries deaths and
  4. Take appropriate action on providers and suppliers that had high numbers of paid and/or unpaid Part B claims with service dates after beneficiaries' deaths.

The investigation found that CMS has several safeguards to prevent this type of fraud, but claims still slipped through and were paid. For Parts A and B, the report said, "CMS implemented a process in April 2011 to prevent improper payments for services and items billed after beneficiaries' deaths. For Parts C and D, CMS automatically disenrolls an individual from a Medicare Advantage plan or prescription drug plan upon his or her death.

"These safeguards, however, did not prevent all improper payments."

In the agency's defense, the report said, that CMS actually paid $610 million to Medicare Advantage companies and prescription drug plan sponsors (Parts C and D) on behalf of deceased beneficiaries, and recovered all but 3% ($21 million.)

Of interest is that about $1 million in improper Medicare payments on behalf of deceased beneficiaries were made to 398 prescription drug plan sponsors, and 12 of them accounted for 70%. And, the report said, one sponsor collected $162,880 on behalf of 465 beneficiaries who had already died. Another sponsor received $140,505 for drugs reportedly provided to 758 beneficiaries whose death certificates listed earlier dates of demise.

The report singled out the high number of claims for services after dates of death that Medicare did not pay, and noted that those providers and suppliers who submitted those claims may be involved in "fraud, waste, or abuse."

For example, in 2011, 46,903 providers and suppliers submitted claims for payment for services after beneficiaries died, and for which Medicare did not pay out. Of these, 190 providers and suppliers had more than 100 unpaid Part B claims with service dates after beneficiaries' dates of death; 75% (143) were suppliers. And of these providers and suppliers, the investigators wrote, "one-fourth (48 of 190) were located in New York City, Los Angeles, or Miami.)"

CMS responded that it is considering the development of a model that would identify providers who submit claims for services after their patients died and if viable, will launch it as part of the Fraud Prevention System next spring.

A 2008 OIG report detailed similar concerns, many of which CMS said it has remedied, and which prevented the agency from making millions more in improper payments.

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