Kusserow’s Corner: CMS Failed to Prevent Millions of Dollars in Services to Unlawful Aliens in the Medicare Advantage Program

Only a person who is a U.S. citizen, U.S. national, or a lawfully present alien may qualify as a federal health care beneficiary. Using CMS data, the CMS Office of Inspector General (OIG) identified 31,303 individuals who were improperly present in the Medicare program and found that 1,591 received benefits through MA that amounted to approximately $26 million paid by CMS. The OIG released a report that found $26.2 million in improper payments were made, under Part C, to Medicare Advantage (MA) organizations for approximately 1,600 unlawfully present beneficiaries, during the period of 2010 through 2012. The errors were as the result of failures on the part of CMS in not notifying MA organizations of the unlawful-presence information in its data systems. In the absence of such notification, MA organizations could not prevent unlawfully present beneficiaries from enrolling. For the same reason, MA organizations could not disenroll beneficiaries whose unlawful-presence status changed after they had enrolled.

MA organizations must accept enrollment requests it receives from beneficiaries, regardless of whether they are received in a face-to-face interview, by mail, by facsimile, or through other mechanisms defined by CMS. Upon receiving such a request, the MA must within 10 calendar days, respond to the individual with either notice acknowledging enrollments, a request for additional information, or a notice or denial. The MA makes their determination based upon information provided by CMS. The core of the problems identified by the OIG included the following:

  • CMS did not notify the MA organizations of the unlawful presence information in its data system and in the absence of such information; MA organization could not prevent unlawfully present individuals from enrolling, or allowing them to disenroll them after they enrolled.
  • In contrast to the fee-for-service (FFS) program, CMS did not have policies and procedures to notify the MA organizations of unlawful presence information in its data system, which would have been able to prevent improper enrollment of unlawful aliens and to disenroll those already enrolled. It also would have enabled CMS to move to recoup any improper payments.

The OIG recommended that CMS take action to:

  1. Recoup the $26.2 million in improper payments they identified in accordance with legal requirements;
  2. Implement policies and procedures, consistent with those in effect under its FFS program, to notify MA organizations of unlawful-presence information and thereby prevent enrollment in MA organizations, disenroll beneficiaries already enrolled, and recoup any improper payments; and
  3. Identify and recoup improper payments made to MA organizations for unlawfully present beneficiaries after our audit period and until policies and procedures have been implemented that would ensure Medicare no longer pays for unlawful beneficiaries.

CMS partially concurred with the OIG’s recommendations.

CMS agreed to the second recommendation and stated it had proposed regulations that would ensure consistency between the FFS and MA programs. It only partially concurred with the third recommendation and stated that until the proposed regulations are finalized, it could not fully recover the improper payments identified by the OIG. CMS did not concur on the part of the third recommendation, stating that the OIG data “was not detailed enough for CMS to determine how the amount was derived, and therefore confirm its accuracy”.

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

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Copyright © 2014 Strategic Management Services, LLC. Published with permission.