To Those That Think That Obamacare Will Lower The Cost Of Health Insurance: $700,000 In Medicaid Payments Paid For Dead People In D.C.

D.C. pays almost $700k for dead patients' health care
Audit turns up millions in overpayments by city

The District shelled out nearly $700,000 in Medicaid payments for dead people, with one payment occurring nearly nine years after the patient died, a new audit has found.

The gaffes are part of nearly $4 million in erroneous payments made by the city's Department of Health Care Finance in 2009, most of which are payments for claims with an invalid or no Social Security number at all. In addition, the Office of the Inspector General audit said the department might have overpaid its billings by $22.6 million, a possibility that health officials are now looking into.

Of the $662,934 paid for services rendered after the patient died, three claims were for an average of about $96,000 and one of those was paid eight years and 10 months years after the resident's death, the audit found. The department is responsible for getting that money back from the health care providers who filed the claims for dead people. In addition, D.C. may be on the hook for any federal money it used to make the payments.

Although the department has corrected many of the clerical and processing errors that caused the bad payments, the findings are expected to increase scrutiny at an upcoming oversight hearing.

"We will dig into why this happened, what has been done to correct it, and how to prevent similar overpayments from happening in the future," said at-large D.C. Councilman David Catania, who chairs the Council's Committee on Health.

In its response to the audit, the department said it implemented a new system in December 2010 with the proper updating capabilities to stop payments for services rendered after a patient's death. The city agency is still investigating all 129 claims paid for the deceased.

The department says is also looking into the audit's finding that it paid $22.6 million extra on Medicaid claims, totaling $124 million. In one extreme example, a payment billed at $225 was paid at $47,549.

But it could have been worse -- the audit pointed to a check for $5.6 million that nearly made it out the door. The bill? $100.

According to the department, "the claim was sent to a clerk for manual resolution and the clerk inadvertently held down the '5' key long enough to create a $5.6 million payment entry." The error "passed through all but a final [department] management check where it was identified and canceled due to its unusually high dollar value."

The department said some of the overpayments are because of changes in insurance rates between billing and payment, thus the payment reflects the higher rate even though the bill came in for the lower rate.

Still, officials are reviewing all 78,361 claims that might include an overpayment.

Fiscal 2009 was the first year in operation for the Department of Health Care Finance, which was created from the D.C. Health Department. Finance paid out roughly $1 billion that year.