A federal audit has revealed that Illinois paid out $4.6 million in state and federal money to health insurance organizations to provide Medicaid to people who are no longer living. Medicaid is funded jointly by states and the federal government to provider health insurance program for qualifying low-income residents.

The U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) discovered that Illinois paid 84 insurance claims for 80 deceased individuals between October 1, 2015, and September 30, 2017. The state did not recover any of the $4.6 million expense:

“The audit covered 11,358 monthly capitation payments — which are a kind of payment arrangement for health care service providers — totaling $5.9 million, made between Oct. 1, 2015, and Sept. 30, 2017. Using a random sample of 100 capitation payments, OIG confirmed Illinois did not recover 84 payments made on behalf of 80 deceased beneficiaries.”

Medicaid managed care organizations (insurers that administer Medicaid benefits for the state) received the state payments.

According to the federal audit, dated August 2019, Illinois authorities explained that a “technical flaw” caused the inappropriate and wasteful payments.

Auditors gave greater detail: “the state did not enter the Medicaid beneficiaries’ dates of death into its system used to process payments and track eligibility and enrollment information.”

Illinois now must pay $3.2 million to the federal government, its share of the federal health department’s subsidy. The OIG also recommends that the state try to recoup the erroneously-expensed funds and add the dates of death to its computer database.

This is not the first time the OIG has determined that a U.S. state has made significant Medicare payments in error. Six other states, including Ohio, Florida, Texas, and California have also been spotlighted for sharing this problem.

In July, Doug Elwell, the Illinois Medicaid administrator, responded in writing to the audit. He confirmed that his state’s Department of Healthcare and Family Services (HFS) will remediate the matter completely with the following actions:

1. DHFS will confirm that beneficiaries identified as deceased on the auditors’ list are, in fact, dead.
2. DHFS will recover all payments made in error and refund the federal government’s portion ($3.2 million).
3. The Illinois processing system for Medicare will be updated to include dates of death.

The $4.6 million in wasteful payments was part of the state’s $11 billion in Medicaid payouts made to managed care organizations during the two-year period examined by the audit.

Prior audits have revealed that Illinois officials failed to learn from their mistakes. The state authorized spending $16 million on Medicaid coverage for 3,961 dead people between 2013 and 2014.

The following year, in 2015, former Illinois Governor Bruce Rauner signed a bill into law mandating that the Illinois HHS perform cross-checks between its Medicare recipient names and those on the death records kept by the Illinois Department of Public Health (DPH).

After the fed’s August 2019 Illinois audit, John Hoffman, representing the Illinois HHS, issued a statement which promised that a new team of managers are “aggressively resolving” the ongoing issue of state Medicare payments to dead people:

“With an experienced new management team, we are aggressively resolving problems such as those raised by this audit, which took place more than a year before this administration began. As the audit states, the department agrees with the recommended solutions and is implementing a range of initiatives that have begun to recoup this money and prevent similar future errors.”

Inattentive and squanderous Illinois also expensed $2.2 million on pension benefits for 1,000 dead people from 2010 to 2014.

Equally seriously, since 2013, when Illinois expanded Medicaid through the Affordable Care Act (ACA), which lowered means-testing requirements for able-bodied adults between the ages of 19 and 64, 823 Illinois residents have not survived their state’s waiting list to receive healthcare – all dead before getting a doctor’s appointment.

Illinois has a hefty $3.2 billion structural deficit, yet continues to let precious revenues flush down a variety of governmental drains.

Anyone who suspects Medicaid or Welfare fraud (including Link Card, the Illinois SNAP/Food Stamp program) may complete and submit a state HFS form or call the Medicaid/Welfare Fraud Hotline at 1-844-453-7283/1-844-ILFRAUD.