Between 2021 and 2022, Medicaid programs issued over $200 million in inappropriate payments to healthcare providers for individuals who were already deceased, according to a new report from the independent watchdog for the .
However, the department’s Office of Inspector General stated that a new provision in the Republicans’ One Big Beautiful Bill— which requires states to audit their Medicaid beneficiary lists— may help reduce these improper payments in the future.
Aner Sanchez, assistant regional inspector general in the Office of Audit Services, told The Associated Press that these types of improper payments are “not unique to one state, and the issue remains persistent.” Sanchez has been researching this problem for a decade.
Released on Tuesday, [the report] noted that more than $207.5 million in managed care payments were made for deceased enrollees between July 2021 and July 2022. The office recommends that the federal government share more information with state governments to recover these incorrect payments— including access to a database known as the Full Death Master File, which contains over 142 million records dating back to 1899.
Sharing data from the Full Death Master File has been strictly restricted due to privacy laws that protect against identity theft and fraud.
The large tax and spending bill signed into law by President Donald Trump this summer expands the uses of the Full Death Master File by mandating Medicaid agencies to conduct quarterly audits of their provider and beneficiary lists against the file starting in 2027. The aim is to stop payments to deceased individuals and improve accuracy.
Tuesday’s report is the first nationwide analysis of improper Medicaid payments. Since 2016, the HHS Inspector General has conducted 18 audits on a selection of state programs and identified that Medicaid agencies had improperly disbursed managed care payments for deceased enrollees totaling approximately $289 million.
Earlier this year, the government had some success using the Full Death Master File to prevent improper payments. In January, the Treasury Department reported that it had clawed back funds that inappropriately went to deceased people as part of a five-month pilot program after Congress granted Treasury temporary access to the file for three years under the 2021 appropriations bill.
Meanwhile, the SSA has been making unusual updates to the file itself— adding and removing records, which complicates its use. For instance, in April, the Trump administration moved to [take action] and cancel Social Security numbers to crack down on immigrants who were temporarily allowed to live in the U.S. under programs launched during the Biden administration.