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March 27, 2018

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Over $100 Million in Medicare Payments for Ineligible Beneficiaries

July 3, 2013:

Regina Magnani, RHIT, Clinical/Technical Editor

In its Semiannual Report to Congress for October 2012 through March 2013, the Office of Inspector General (OIG) reported that, between 2009 and 2011, more than $125 million in Medicare payments were made for patients who were not lawfully present in the United States or were incarcerated.

A lawfully present Medicare patient is an immigrant living in the United States legally. Unlawful presence occurs when a non-U.S. citizen remains in the United States longer than the time authorized by U.S immigration authorities. Incarcerated patients are people who are under arrest, are imprisoned, reside in a halfway house, or are required to live under home detention. Medicare does not make payments for the care of unlawfully present patients and generally does not pay for incarcerated patients.

The Centers for Medicare and Medicaid Services uses Social Security Administration (SSA) data and information from prison systems and other federal agencies to identify unlawfully present and incarcerated patients. CMS does not always receive this information promptly, however, and ineligible claims are paid as a result. The agency does not have policies and procedures for detecting the erroneous payments and recovering the money.

The OIG audit found that $91.6 million in improper payments were made on behalf of unlawfully present beneficiaries and that $33.6 million in improper payments were made on behalf of incarcerated beneficiaries. Medicare contractors were to recoup those payments. The OIG recommended that CMS put into place administrative policies and procedures to detect and recoup improper payments when the information is received on previously paid Medicare claims. The OIG also suggested that CMS work with the SSA, its primary source of information about incarcerated beneficiaries, to improve the timeliness of information.


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