Are Prisoners Getting Medicare Benefits?


In what’s beginning to sound like a broken record, large-scale improper payments have been discovered in the Medicare program, this time related to prisoners. A recent Health and Human Services Office of Inspector General report said Medicare made roughly $34 million in payments on behalf of prisoners in 2013 and 2014, a clear violation of the program’s regulations.

The report is the third in recent years to document improper payments on behalf of Medicare beneficiaries in prison, following a 2014 OIG report that identified $12 million in improper prescription drug payments from 2006 to 2010 and a 2013 OIG report that identified $34 million in improper payments from 2009 to 2011. Medicare prohibits payments on behalf of beneficiaries who are under arrest or in prison. When Medicare beneficiaries are in prison, state or local government is responsible for paying their health-care costs, not Medicare.

I spoke with Day Pitney’s Eric Fader, who said the report highlighted oversight failures within the Centers for Medicare & Medicaid Services. The CMS turned off a post-payment claims editing function that could have identified the improper payments and led to their recovery without having a backup plan in place, Fader said.

The CMS said it switched off the post-payment edits because it was worried that data from the Social Security Administration (SSA) weren’t accurate. Officials from the CMS told the OIG that the data often classified a Medicare beneficiary as being in prison when he or she was already ready released, and said that keeping the edits in place could cause legitimate payments to be identified as improper.

The OIG recommended that the CMS create policies and procedures to prevent future improper payments on behalf of prisoners, and said Medicare contractors should try to recover the $34 million. The CMS said it would review the improper payments and try to recover as much as possible, but said creating new policies and procedures would require signing data collection agreements with every prison in the country, which would duplicate the data received from the SSA.

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