Zalma on Insurance
Education • Business
Insurance Claims professional presents articles and videos on insurance, insurance Claims and insurance law for insurance Claims adjusters, insurance professionals and insurance lawyers who wish to improve their skills and knowledge. Presented by an internationally recognized expert and author.
Interested? Want to learn more about the community?
April 12, 2022
Medicaid Paid Benefits to the Dead: Incompetence or Fraud or Both

True Crime of Insurance Fraud Video Number 53

Read the full article at https://www.linkedin.com/pulse/true-crime-insurance-fraud-video-number-53-barry-zalma-esq-cfe and see the full video at https://rumble.com/v10mpod-true-crime-of-insurance-fraud-video-number-53.html and at

and at https://zalma.com/blog plus more than 4150 posts.

Posted on April 12, 2022 by Barry Zalma
Share
Medicaid Paid Benefits to the Dead: Incompetence or Fraud or Both

See the full video at https://rumble.com/v10mpod-true-crime-of-insurance-fraud-video-number-53.html and at
INDIANA

The state of Indiana paid some $1.1 million in Medicaid-related payments in 2016 and 2017 to managed-care organizations (MCO) on behalf of beneficiaries who were dead, according to federal auditors reported by the United States Department of Justice.

The audit, carried out by the Department of Health and Human Services Office of Inspector General (OIG) and released on February 13, 2020 revealed that in a random sample of 100 so-called capitation disbursements made to MCOs, the state of Indiana “made 95 unallowable payments.”

The Office of the Attorney General found:

Indiana made capitation payments on behalf of deceased beneficiaries. We confirmed that 70of the 71beneficiaries associated with the 100 capitation payments in our stratified random sample were deceased. Of the 100 capitation payments, Indiana made 95 unallowable payments totalling $79,403 ($58,773 Federal share). On the basis of our sample results, we estimated that Indiana made payments totalling at least $1.1 million ($862,097 Federal share) to MCOs on behalf of deceased beneficiaries during our audit period.

Indiana did not always fully process Medicaid beneficiaries’ death information in the MMIS. Although the State agency’s eligibility systems interfaced with Federal and State data exchanges that identify dates of death, the State agency did not enter the dates of death in the MMIS for 48 of our sampled beneficiaries. Additionally, the State agency did not recover the capitation payments for 22 sampled beneficiaries that did have a date of death in the MMIS.

The organizations that received the unlawful payments are part of the Medicaid Managed Care health care delivery system.

Medicaid agencies and managed care organizations (MCOs) that accept a set per member per month (capitation) payment for these services,” the Medicaid program site states. MCOs use capitation payments to manage health care costs, utilization, and quality.

The OIG concluded that the State agency made capitation payments on behalf of deceased beneficiaries. OIG confirmed that 70 of 71 beneficiaries associated with the 100 capitation payments in our sample were deceased. Of the 100 capitation payments, the State agency made 95 unallowable payments totalling $79,403 ($58,773 Federal share).

The State agency did not recover any of the 95 sampled capitation payments. On the basis of the sample results, the DOJ estimated that the State agency made payments totalling at least $1.1 million10($862,097 Federal share) to MCOs on behalf of deceased beneficiaries for service dates during the audit period.

Yet aspects of the system have been plagued by problems, with the Indiana report coming on the heels of others that similarly found that some states had improperly paid capitation payments on behalf of the deceased.

Similarly, an audit released in September 2019 found that Illinois paid an estimated $4.6 million to MCOs to cover deceased Medicaid beneficiaries. Illinois Medicaid administrator Doug Elwell acknowledged the findings in a written response to the audit and said state authorities would try to recover the improper payments and refund them to the federal government.

Similarly, Indiana Medicaid Director Allison Taylor said in a written response included in the audit that the state agrees with the conclusions of the report and will seek to recoup the payments.

There are more than 71 million people currently covered under Medicaid, the social safety net program created five decades ago and expanded by President Barack Obama through the Affordable Care Act, commonly known as Obamacare. The Trump administration has sought to reform the system, recently announcing that it would test letting state Medicaid programs limit health benefits and prescription drug coverage for some patients in return for changing how federal government contributions to the states are made.
The Failure of the State Agency

The contracts between the State agency and the MCOs required compliance with the provisions in Indiana’s Hoosier Healthwise and Healthy Indiana Plan MCE Policies and Procedures Manual, which states that beneficiaries’ enrolment will be terminated upon death and that payments to the MCO will be adjusted for retroactive disenrollment of the beneficiaries.

The State agency did not always process Medicaid beneficiaries’ death information or recover capitation payments in the MMIS. When the State agency properly processes death information, the MMIS uses that information to identify a beneficiary as deceased, stop future capitation payments, and initiate the recovery process for capitation payments that were made after the beneficiary’s month of death.
What OIG Recommended

The Office of the Attorney General recommended that Indiana:

refund $862,097 to the Federal Government;

identify and recover unallowable payments made to MCOs during our audit period on behalf of deceased beneficiaries, which we estimate to be at least $1.1 million;

identify capitation payments made on behalf of deceased beneficiaries before and after our audit period, and repay the Federal share of amounts recovered; and

ensure that dates of death are added to the MMIS and that capitation payments made after the beneficiaries’ deaths are recovered

Unallowable Payments for Beneficiaries Who Had a Date of Death

Dates of death were recorded in the MMIS for 22 of the 70 deceased beneficiaries. Nevertheless, the State agency made unallowable payments on behalf of these deceased beneficiaries. The State agency stated that it would conduct further research to determine why it did not recover the 27 capitation payments for these beneficiaries.
Michigan

The OIG estimated that Michigan made unallowable capitation payments totalling at least $39.9 million ($27.5 million Federal share) to managed care entities on behalf of deceased beneficiaries during our audit period. Of the 100 capitation payments in the stratified random sample, Michigan made 99 unallowable payments totalling $117,746 ($79,348 Federal share).

The unallowable payments occurred because Michigan did not always identify and process Medicaid beneficiaries’ death information. Although Michigan’s MMIS and eligibility systems interfaced with State and Federal death files that identify dates of death, Michigan did not always identify those dates of death in its MMIS system, and the MMIS system and eligibility system did not share dates of death information with each other. Michigan also did not recover payments caused by dates of death not promptly identified in its MMIS system.

OIG recommended that Michigan (1) refund $27.5 million to the Federal Government; (2) identify and recover unallowable payments made to managed care entities during our audit period on behalf of deceased beneficiaries, which OIG estimated to be at least $39.9 million; and (3) identify capitation payments made on behalf of deceased beneficiaries before and after the audit period and repay the Federal share of amounts recovered.

(c) 2022 Barry Zalma & ClaimSchool, Inc.

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 54 years in the insurance business. He is available at http://www.zalma.com and [email protected].

Subscribe to Zalma on Insurance at locals.com https://zalmaoninsurance.local.com/subscribe.

Subscribe to Excellence in Claims Handling at https://barryzalma.substack.com/welcome.

Write to Mr. Zalma at [email protected]; http://www.zalma.com; http://zalma.com/blog; daily articles are published at https://zalma.substack.com.

Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma; Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/

Barry Zalma, Esq., CFE presents videos so you can learn how insurance fraud is perpetrated and what is necessary to deter or defeat insurance fraud.

Interested? Want to learn more about the community?
What else you may like…
Videos
Posts
15 hours ago
Ambiguity in Insurance Contract Resolved by Jury

Jury’s Findings Interpreting Insurance Contract Affirmed
Post 5105

See the full video at https://lnkd.in/gPa6Vpg8 and at https://lnkd.in/ghgiZNBN, and at https://zalma.com/blog plus more than 5100 posts.

Madelaine Chocolate Novelties, Inc. (“Madelaine Chocolate”) appealed the district court’s judgment following a jury verdict in favor of Great Northern Insurance Company (“Great Northern”) concerning storm-surge damage caused by “Superstorm Sandy” to Madelaine Chocolate’s production facilities.

In Madelaine Chocolate Novelties, Inc., d.b.a. The Madelaine Chocolate Company v. Great Northern Insurance Company, No. 23-212, United States Court of Appeals, Second Circuit (June 20, 2025) affirmed the trial court ruling in favor of the insurer.

BACKGROUND

Great Northern refused to pay the full claim amount and paid Madelaine Chocolate only about $4 million. In disclaiming coverage, Great Northern invoked the Policy’s flood-exclusion provision, which excludes, in relevant part, “loss or damage caused by ....

00:07:02
June 23, 2025
The Clear Language Of The Insurance Contract Controls

Failure to Name a Party as an Additional Insured Defeats Claim
Post 5104

Read the full article at https://lnkd.in/gbcTYSNa, see the full video at https://lnkd.in/ggmDyTnT and at https://lnkd.in/gZ-uZPh7, and at https://zalma.com/blog plus more than 5100 posts.

Contract Interpretation is Based on the Clear and Unambiguous Language of the Policy

In Associated Industries Insurance Company, Inc. v. Sentinel Insurance Company, Ltd., No. 23-CV-10400 (MMG), United States District Court, S.D. New York (June 16, 2025) an insurance coverage dispute arising from a personal injury action in New York State Supreme Court.

The underlying action, Eduardo Molina v. Venchi 2, LLC, et al., concerned injuries allegedly resulting from a construction accident at premises owned by Central Area Equities Associates LLC (CAEA) and leased by Venchi 2 LLC with the USDC required to determine who was entitled to a defense from which insurer.
KEY POINTS

Parties Involved:

CAEA is insured by Associated Industries Insurance Company, Inc. ...

00:08:22
June 20, 2025
Four Corners of Suit Allows Refusal to Defend

Exclusion Establishes that There is No Duty to Defend Off Site Injuries

Post 5103

Read the full article at https://lnkd.in/geje73Gh, see the full video at https://lnkd.in/gnQp4X-f and at https://lnkd.in/gPPrB47p, and at https://zalma.com/blog plus more than 5100 posts.

Attack by Vicious Dog Excluded

In Foremost Insurance Company, Grand Rapids, Michigan v. Michael B. Steele and Sarah Brown and Kevin Lee Price, Civil Action No. 3:24-CV-00684, United States District Court, M.D. Pennsylvania (June 16, 2025)

Foremost Insurance Company (“Foremost”) sued Michael B. Steele (“Steele”), Sarah Brown (“Brown”), and Kevin Lee Price (“Price”) (collectively, “Defendants”). Foremost sought declaratory relief in the form of a declaration that

1. it owes no insurance coverage to Steele and has no duty to defend or indemnify Steele in an underlying tort action and
2. defense counsel that Foremost has assigned to Steele in the underlying action may withdraw his appearance.

Presently before the Court are two ...

00:08:29
May 15, 2025
Zalma's Insurance Fraud Letter - May 15, 2025

ZIFL Volume 29, Issue 10
The Source for the Insurance Fraud Professional

See the full video at https://lnkd.in/gK_P4-BK and at https://lnkd.in/g2Q7BHBu, and at https://zalma.com/blog and at https://lnkd.in/gjyMWHff.

Zalma’s Insurance Fraud Letter (ZIFL) continues its 29th year of publication dedicated to those involved in reducing the effect of insurance fraud. ZIFL is published 24 times a year by ClaimSchool and is written by Barry Zalma. It is provided FREE to anyone who visits the site at http://zalma.com/zalmas-insurance-fraud-letter-2/ You can read the full issue of the May 15, 2025 issue at http://zalma.com/blog/wp-content/uploads/2025/05/ZIFL-05-15-2025.pdf
This issue contains the following articles about insurance fraud:

Health Care Fraud Trial Results in Murder for Hire of Witness

To Avoid Conviction for Insurance Fraud Defendants Murder Witness

In United States of America v. Louis Age, Jr.; Stanton Guillory; Louis Age, III; Ronald Wilson, Jr., No. 22-30656, United States Court of Appeals, Fifth Circuit (April 25, 2025) the Fifth Circuit dealt with the ...

May 15, 2025
CGL Is Not a Medical Malpractice Policy

Professional Health Care Services Exclusion Effective

Post 5073

See the full video at https://lnkd.in/g-f6Tjm5 and at https://lnkd.in/gx3agRzi, and at https://zalma.com/blog plus more than 5050 posts.

This opinion is the recommendation of a Magistrate Judge to the District Court Judge and involves Travelers Casualty Insurance Company and its duty to defend the New Mexico Bone and Joint Institute (NMBJI) and its physicians in a medical negligence lawsuit brought by Tervon Dorsey.

In Travelers Casualty Insurance Company Of America v. New Mexico Bone And Joint Institute, P.C.; American Foundation Of Lower Extremity Surgery And Research, Inc., a New Mexico Corporation; Riley Rampton, DPM; Loren K. Spencer, DPM; Tervon Dorsey, individually; Kimberly Dorsey, individually; and Kate Ferlic as Guardian Ad Litem for K.D. and J.D., minors, No. 2:24-cv-0027 MV/DLM, United States District Court, D. New Mexico (May 8, 2025) the Magistrate Judge Recommended:

Insurance Coverage Dispute:

Travelers issued a Commercial General Liability ...

April 30, 2025
The Devil’s in The Details

A Heads I Win, Tails You Lose Story
Post 5062

Posted on April 30, 2025 by Barry Zalma

"This is a Fictionalized True Crime Story of Insurance Fraud that explains why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers. The story is designed to help everyone to Understand How Insurance Fraud in America is Costing Everyone who Buys Insurance Thousands of Dollars Every year and Why Insurance Fraud is Safer and More Profitable for the ­­­Perpetrators than any Other Crime."

Immigrant Criminals Attempt to Profit From Insurance Fraud

People who commit insurance fraud as a profession do so because it is easy. It requires no capital investment. The risk is low and the profits are high. The ease with which large amounts of money can be made from insurance fraud removes whatever moral hesitation might stop the perpetrator from committing the crime.

The temptation to do everything outside the law was the downfall of the brothers Karamazov. The brothers had escaped prison in the old Soviet Union by immigrating to the United...

post photo preview
See More
Available on mobile and TV devices
google store google store app store app store
google store google store app tv store app tv store amazon store amazon store roku store roku store
Powered by Locals