Listen to the article
Medicaid System Under Scrutiny as Millions Paid for Deceased Enrollees
A troubling investigation by the Foundation for Government Accountability (FGA) has uncovered significant flaws in how states manage Medicaid eligibility verification, resulting in hundreds of millions of dollars paid on behalf of deceased individuals. The findings have intensified calls for reform from watchdog groups, including DOGE, which have been highlighting these systemic issues for months.
The FGA’s report analyzes data from a 2023 audit conducted by the Health and Human Services (HHS) Office of Inspector General. Federal auditors examined Medicaid managed-care payments across 14 states over a ten-year period from 2009 to 2019. Their findings revealed more than 450,000 capitation payments—monthly fees paid to healthcare providers for each enrolled patient—were disbursed after enrollees had died, totaling approximately $318 million.
Federal authorities determined about $249 million of these payments were definitively “unallowable” under program rules, representing a clear misuse of taxpayer funds.
The investigation extends beyond payments for deceased enrollees to broader questions about Medicaid spending accuracy. The FGA claims that more than 20 percent of all Medicaid expenditures are “improper” – a figure that would represent a massive drain on public resources if accurate.
However, significant disagreement exists between government agencies and outside analysts regarding the true scale of improper payments. The Centers for Medicare & Medicaid Services (CMS), which oversees the Medicaid program, reports a much lower improper payment rate of 5.09 percent for 2024, equivalent to approximately $31 billion.
CMS maintains that most of these improper payments stem from documentation errors rather than fraud or payments to ineligible individuals. The agency characterizes these as administrative issues where paperwork doesn’t meet program standards, rather than payments for services that shouldn’t have been covered.
By contrast, the FGA and Paragon Health Institute argue that CMS substantially underestimates the problem. These organizations place the improper payment rate closer to 25 percent, suggesting that approximately $543 billion in Medicaid payments over the past decade may have been incorrect.
The second part of the FGA’s analysis explores the root causes behind these payment errors. Rather than pointing primarily to deliberate fraud, the report identifies structural weaknesses within the Medicaid eligibility verification system. State agencies often lack robust processes to cross-reference enrollee status against death records or to periodically verify continued eligibility.
The financial impact of these systemic failures is substantial. Using even the more conservative CMS estimates, improper Medicaid payments reached approximately $31.1 billion in 2024, down from about $50 billion (8.5 percent of total spending) in 2023. Over the past decade, the cumulative total approaches half a trillion dollars in questionable payments.
These findings come at a particularly sensitive time for Medicaid. The program has undergone significant expansion since the Affordable Care Act’s implementation, with enrollment surging further during the COVID-19 pandemic. States are now in the process of redetermining eligibility for millions of beneficiaries after the end of pandemic-related continuous enrollment provisions.
Healthcare policy experts note that improving verification systems could potentially save billions while ensuring resources reach those who truly qualify for assistance. However, they caution that overly aggressive eligibility checks risk disrupting care for legitimate beneficiaries, particularly vulnerable populations.
The “ghost payments” for deceased enrollees represent one of the most clear-cut examples of preventable errors within the system. Unlike some eligibility questions that involve complex determinations, death status verification should be straightforward with proper data-sharing between government agencies.
As federal and state officials grapple with these findings, the challenge remains balancing program integrity with Medicaid’s core mission of providing healthcare access to low-income Americans.
Fact Checker
Verify the accuracy of this article using The Disinformation Commission analysis and real-time sources.
16 Comments
This is a concerning report. Taxpayer money should be used responsibly, not frittered away on deceased Medicaid recipients. Rigorous oversight and accountability measures are clearly needed to prevent these kinds of wasteful payouts in the future.
You’re right, this is an unacceptable misuse of public funds. State Medicaid programs must tighten up their eligibility verification processes to stop these improper payments.
I appreciate the effort by the HHS OIG to uncover these issues through rigorous auditing. While the findings are distressing, this kind of independent oversight is essential for identifying and addressing problems in large government programs.
Agreed. Audits and investigations by nonpartisan government watchdogs play a vital role in promoting responsible use of public funds and identifying areas for improvement.
As a taxpayer, I’m glad to see this issue being investigated and brought to light. Rooting out waste, fraud and abuse in government programs should be a top priority. Hopefully this leads to meaningful reforms that protect the integrity of the Medicaid system.
As a Medicaid recipient, I’m concerned about the implications of this report. While the scale of the improper payments is significant, I hope it doesn’t lead to overzealous eligibility reviews that create undue burdens for genuinely eligible enrollees.
That’s an important consideration. Any reforms should balance program integrity with ensuring access to critical healthcare services for truly eligible individuals.
This report raises serious questions about the management of the Medicaid program. While the scale of the improper payments is concerning, I’m hopeful that it will spur meaningful reforms to strengthen eligibility verification and payment controls.
While the scale of the misspent funds is alarming, I’m heartened to see independent oversight bodies like the HHS OIG conducting rigorous audits. Their findings will hopefully spur much-needed reforms to strengthen Medicaid program integrity.
Clearly there are significant gaps in how states manage Medicaid eligibility and enrollment data. This latest report underscores the need for better data sharing, verification procedures and internal controls across state Medicaid agencies. Modernizing these systems should be a priority.
Agreed. Improving data management and coordination between state and federal Medicaid programs is crucial to prevent these kinds of erroneous payments in the future.
While the scale of these erroneous payments is troubling, I’m curious to understand the root causes. Were these simply administrative errors, or are there deeper systemic issues at play? Addressing the underlying problems is key to ensuring responsible use of taxpayer dollars.
Good point. The report should examine the specific reasons behind these improper payments so policymakers can implement effective solutions. Transparency around the audit findings will be important.
This is a troubling report, but not entirely surprising given the well-documented challenges in managing large government healthcare programs. Rooting out waste and abuse should be an ongoing priority, not just a one-off effort.
You make a fair point. Vigilance and continuous improvement are needed to ensure responsible stewardship of taxpayer dollars in Medicaid and other government programs.
This report highlights the need for greater data transparency and accountability across state Medicaid agencies. Taxpayers deserve to know how their money is being spent, and where inefficiencies or mismanagement are occurring.