Health Reform WK-EDGE CMS succeeds in limiting payments after beneficiary’s death
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Thursday, April 26, 2018

CMS succeeds in limiting payments after beneficiary’s death

By Robert B. Barnett Jr., J.D.

CMS is doing a reasonably good job of ensuring both that capitation payments for Medicare Part D coverage are not made after beneficiaries die and payments made in error are recouped, according to an HHS Office of Inspector General (OIG) study. Although CMS improperly paid more than $1.1 million in capitation payments during the period studied, the overpaid amount was only .0004 percent of total capitation payments and less than 1 percent of total adjustments / recoupment efforts during the period. CMS agreed to implement the OIG’s recommendations to recoup the $1.1 million and enhance its system to recoup future improper capitation payments (OIG Report, No. A-07-16-05088, April 12, 2018).

Medicare payments and beneficiary death. The Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) sought to reduce excessive Medicare payments—including those made through Medicare Advantage and the Medicare Part D Coverage Gap Discount Program (CGDP). The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) (P.L. 114-10) required CMS to establish policies to ensure that payments are not made for Medicare services purportedly rendered after a beneficiary’s death. Generally, CMS obtains date-of-death information from one or more of three sources: (1) the Social Security Administration; (2) the Railroad Retirement Board; or (3) various inpatient medical facilities where beneficiaries die. At that point, the beneficiary is disenrolled from Medicare and payments are automatically stopped. If a beneficiary dies in the middle of a month, the disenrollment effective date is the first of the next month. Adjustments are made to the sponsor’s monthly capitation payment to reflect the death and to recover any overpayments.

OIG findings and recommendations. Total Part D capitation payments for all beneficiaries in the period studied by the OIG were more than $253.7 billion. In that time, CMS made more than 5 million adjustments to capitation payments, and recouped about $1.13 billion. The agency missed, however, $1.1 million in overpayments involving 65,398 separate capitation payments. Given that the error rate was .0004 percent of total capitation payments and .097 percent of total adjustments and efforts to recoup, the OIG concluded that CMS was doing a reasonably good job of complying with MACRA. The OIG recommended that CMS recoup the $1.1 million in capitation payments made to deceased beneficiaries, and CMS continue to implement system enhancements to identify, adjust, and recoup future improper capitation payments. CMS concurred with the findings, accepted both recommendations, and described corrective actions it intends to take to recoup improper capitation payments.

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