Medicaid paid more than $200 million to people who died in 2021 and 2022, federal watchdog says

But the department’s Office of Inspector General said it expects that a new provision in Republicans’ One Big Beautiful Bill requiring states to audit their Medicaid beneficiary lists could help reduce such irregular payments in the future.

These types of irregular payments “are not unique to any single state, and the problem continues to be persistent,” Aner Sanchez, deputy regional inspector general for the Office of Audit Services, told the Associated Press. Sanchez has been studying this question for a decade.

The watchdog report released Tuesday, said more than $207.5 million in managed care payments were made on behalf of enrollees who died between July 2021 and July 2022. The office recommends that the federal government share more information with state governments to recover incorrect payments — including a Social security database known as the Full Death Master File, which contains over 142 million records dating back to 1899.

Sharing of Full Death Master File data has been strictly limited due to privacy laws that protect against identity theft and fraud.

The massive tax and spending bill that was signed into law by President Donald Trump this summer expands how the Full Death Master File can be used by requiring Medicaid agencies to check their provider and beneficiary lists against the file quarterly, starting in 2027. The intent is to stop payments to deceased people and improve accuracy.

Tuesday’s report is the first national examination of improper Medicaid payments. Since 2016, the HHS Inspector General has conducted 18 audits of selected state programs and identified that Medicaid agencies had improperly made managed care payments on behalf of deceased enrollees, totaling approximately $289 million.

The government had some success using the Full Death Master File to prevent irregular payments earlier this year. In January, the Treasury Department announced that it had recovered more than $31 million in federal payments which was improperly awarded to deceased individuals as part of a five-month pilot program after Congress gave Treasury temporary access to the record for three years as part of the 2021 appropriations bill.

Meanwhile, the Social Security Administration has made unusual updates to the file itself, adding and removing records and complicating its use. For example, the Trump administration moved in April classify thousands of living immigrants as dead and cancel their Social Security numbers to crack down on immigrants who had been temporarily allowed to live in the United States under programs launched under the Biden administration.