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Dead to rights: Virginia caught paying Medicaid services for over 12,000 deceased enrollees

Erroneous payments totaled at least $20.8 million.

Federal auditors found Virginia’s Medicaid program paid managed care organizations at least $20.8 million in capitation payments from 2019-21 for more than 12,000 deceased enrollees during those years.

As Medicaid is a government-provided benefit, whereas individuals or their employers typically pay a monthly health insurance premium for coverage, Virginia pays that amount on behalf of the enrollee to managed care organizations and is reimbursed a percentage by the federal government.

“Managed care organizations,” in this case, refers to the health insurance providers that offer Medicaid coverage in Virginia. Those are Aetna, Anthem Blue Cross Blue Shield, Molina Healthcare, Inc., Optima Health and United Healthcare; they provide Medicaid coverage to Virginians, and the state supports those services by paying those providers the equivalent of each enrollee’s monthly Medicaid premium. These are called “capitation payments.”

The U.S. Health and Human Services Inspector General tested a random, stratified, computer-generated sample of 100 capitation payments Virginia made during the pandemic years and confirmed that 67 of these were made erroneously after the month in which the Medicaid enrollee passed away.

It’s possible that more errors were made and not reflected in the audit because the Department of Medical Assistance Services, Virginia’s Medicaid program, updated some of the data before the audit began.

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